KARACHI: Pakistan’s new government is expected to approach the International Monetary Fund (IMF) in the last week of August or early September for financial assistance. The country desperately needs to stabilize the economy, say officials.
The caretaker officials have already started work on the program agenda to be presented to the fund, Dr. Shamshad Akhtar, Pakistan’s caretaker finance minister recently confirmed, saying that they are “working on the agenda just to save the time of the ncoming government.”
The Pakistan Tehreek-e-Insaf (PTI), led by Imran Khan, gained a majority of votes in the election on July 25.
Khan is working on the formation of a new government and is expected to take the oath of office of prime minister on Aug. 11, before the country’s independence day which falls on Aug. 14.
“The final decision to approach IMF, including the required amount, will be taken soon after the formation of a new government,” Senator Mohsin Aziz, member of the Senate’s committee on finance, revenue and economic affairs, told Arab News.”Currently the party is contemplating other options as well to avoid the IMF program, including financial assistance from China and import of oil on credit or deferred payment from Saudi Arabia, but the situation is worst,” said Senator Aziz, who belongs to the PTI.
The country is expected to seek between $6 and $12 billion financial assistance from the IMF.
“The actual need of the country is $28 billion. However, from the IMF the country can avail up to $6 billion out of its $12 billion Special Drawing Rights (SDR) quota as the country has already consumed half of the quota by availing the program in 2013,” Dr. Hafeez Pasha, former finance minister and economist, told Arab News.
Pasha, however, said it would be difficult to get loan of up to $12 billion from the IMF.
“It may only be possible if the friendly countries, especially Washington, support Pakistan in this case. If Pakistan manages to get an IMF loan, other lenders such as the Asian Development Bank and the World Bank can also step forward to help as they need a letter of comfort from the IMF,” Pasha noted.
Pakistan is suffering from historical external account imbalances as its current account deficit swelled to $18 billion by the end of the fiscal year 2018.
The country’s dollar reserves have declined to $9 billion which is not even enough to cover its two months’ import requirements.
The country’s national currency, the Pak rupee, has been constantly under pressure due to the demand-supply gap.
However, after the election the sentiments have changed in favor of the PTI, which resulted in appreciation of the Pak rupee.
On Monday the Pak rupee in the interbank market traded at 124/126, which is an appreciation of 3 percent over Friday’s close of 127.90.
This follows gains witnessed in open market over the weekend where the dollar was quoted at 121/122 compared with the pre-election level of 131.80, an appreciation of 4 to 5 percent.
“The sentiments after election have changed the trends in the open market where we have abundant stocks of currency but no buyers,” Zafar Paracha, general secretary of Exchange Companies Association of Pakistan, told Arab News.
Paracha attributes currency appreciation to three factors: suspension of currency smuggling from Afghanistan and Iran due to the border closure, steps taken by State Bank of Pakistan against unregistered exchange companies, and the sentiment that arose after the election victory of PTI.
Pakistan’s stock market also reacted positively after the election, gaining 2,218 points as investors expressed satisfaction over political clarity.
“Recent news flow regarding a loan from China of $2 billion and possible assistance from Saudi Arabia is helping foreign exchange market sentiments,” said Muhammad Sohail, CEO of Topline Securities.
Senator Aziz said: “Positive sentiments prevail in the currency and stock market of the country but these are not going to stay for long as the country’s actual situation is worse.”
The country will have to seek financial assistance from the IMF, he added.
Pakistan to approach IMF soon after formation of new government, say officials
Pakistan to approach IMF soon after formation of new government, say officials
- Oil import on credit from Saudi Arabia, loan from China may ease external pressure, PTI senator Mohsin Aziz says
- Pakistan needs $28 billion, seeks up to $12 billion IMF bailout package, economist says
Pakistani forces kill 6 militants in volatile northwest near Afghanistan— army
- Pakistani security forces carry out twin raids in Dera Ismail Khan, North Waziristan districts
- Such operations are often conducted against Pakistani Taliban or Tehreek-e-Taliban Pakistan group
PESHAWAR, Pakistan: Pakistani security forces killed six militants in twin raids Wednesday targeting their hideouts in the country’s volatile northwest region bordering Afghanistan, the military said.
Five militants were killed in the first raid in Dera Ismail Khan district in Khyber Pakhtunkhwa province, the military said in a statement. It did not provide further details about the slain insurgents, and only said the men were behind various previous attacks on the security forces.
Another militant was killed in the second raid in a former stronghold of the Pakistani Taliban in the North Waziristan district in the northwest.
The statement did not provide any further details about the identity of the slain men.
Such operations often target the Pakistani Taliban, which has been emboldened by the Taliban takeover of Afghanistan in 2021. Known as the Tehreek-e-Taliban Pakistan or TTP, it is a separate group but a close ally of the Afghan Taliban.
Pakistan hikes electricity prices by Rs2.83 per unit citing fuel cost adjustment
- Fuel cost adjustment for March to reflect in consumers’ bills for the month of May, says power regulator
- Pakistan has been caught in a high inflationary cycle since April 2022 due to surging food and fuel prices
ISLAMABAD: Pakistan’s National Electric Power Regulatory Authority (NEPRA) on Wednesday authorized distribution companies to levy a Rs2.83 per unit additional charge on consumers’ bills for May, with the move likely to fuel inflation in a country already suffering an economic crisis.
A notification by NEPRA seen by Arab News stated that the fuel cost adjustment pertains to March, adding that the additional charges would apply to all consumer categories except “Electric Vehicle Charging Stations (EVCS) and lifeline consumers.”
“The said adjustment shall be shown separately in consumers’ bills on the basis of units billed to the consumer in the month of March 2024,” the notification said.
Pakistan has been caught in a high inflationary spiral since April 2022, with the highest-ever inflation rate recorded at 38 percent in May 2023. The government credits soaring inflation to painful decisions it had to take to meet conditions for an International Monetary Fund (IMF) bailout program, including hiking energy tariffs and fuel prices.
Gas and electricity rates were hiked by 318.7 percent and 73 percent respectively in a year, according to official data.
The price hikes come as Pakistan is set to begin discussions with the IMF this month over a new multi-billion-dollar loan agreement after completing its nine-month, $3 billion loan arrangement with the lender.
Under the last IMF bailout, Pakistan was told to prevent further accumulation of circular debt in its power sector, arising from subsidies and unpaid bills. For a new program, the South Asian nation will need to implement reforms to reduce costs by improving electricity transmission and distribution, moving captive power into the grid, improving governance, and combating theft.
It will also have to maintain power and gas tariffs at levels that ensure cost recovery, with adjustments made to safeguard the financially vulnerable, through existing progressive tariff structures.
Senior World Bank official concludes Pakistan trip after discussing reforms with officials
- World Bank Vice President for South Asia Martin Raiser meets PM Sharif, key officials in Islamabad
- Raiser praises Pakistan’s reform plans to boost growth, attract private investment and tackle poverty
ISLAMABAD: A senior World Bank official concluded his three-day visit to Pakistan on Wednesday, holding discussions with Prime Minister Shehbaz Sharif and key government ministers on Islamabad’s fiscal and economic reforms, a statement from the international institution said.
World Bank Vice President for South Asia Martin Raiser arrived in the federal capital on May 6, with his visit taking place as Pakistan faces a chronic balance of payment crisis, forcing it to turn to the International Monetary Fund (IMF) for a new long-term bailout deal.
Pakistan has faced the challenges of revenue generation and government expenditure in the past and struggled with high levels of debt, a large fiscal deficit and an ongoing need for structural reforms to improve its fiscal sustainability.
“The World Bank Vice President for South Asia, Martin Raiser, concluded his three-day visit to Pakistan today and reaffirmed the World Bank’s support to stabilize the economy and accelerate inclusive and resilient growth,” a press release by the international institution read.
It said Raiser met Sharif, ministers of finance, water, power, energy, and petroleum, and his counterparts to discuss Pakistan’s development priorities.
“The discussions focused on economic and fiscal reforms, human capital development, adaptation to climate change, energy sector reforms, and digitalization as a foundational enabler and accelerator of development,” the World Bank added. \
Raiser said he was pleased to learn of Pakistan’s reform plans to boost growth and attract private investment, strengthen climate resilience, and invest in human capital to tackle daunting challenges such as child stunting and poverty.
The World Bank official also visited Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province to meet Chief Minister Ali Amin Gandapur.
“Discussions focused on the provincial developmental priorities and how can the World Bank step up its support in key sectors, like education, water and sanitation, health, rural roads, and livelihoods,” the statement said.
He also attended a national conference on education in Islamabad, where PM Sharif also spoke. Raiser reaffirmed the World Bank’s commitment to urgent action to tackle the large number of out-of-school children in Pakistan.
PM Sharif declares ‘education emergency’ across Pakistan to enroll out-of-school children
- Pakistan has one of the world’s highest out-of-school children population at 26.2 million
- PM Shehbaz Sharif says will personally oversee the national program to ensure its success
ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday declared an “education emergency” across Pakistan on Wednesday, vowing to personally oversee the program which he hoped would enroll over 26.2 million out-of-school children in educational institutions.
Pakistan has the second-highest population of out-of-school children in the world at 26.2 million, according to Unicef Pakistan. Pakistani experts have identified population growth, lack of localized strategies, and economic issues as the main reasons why over 26 million Pakistani children are not enrolled in schools across the country.
A report by Pakistan’s education ministry in January revealed that out of 26.2 million out-of-school children, 11.73 million are in Punjab, 7.63 million in Sindh, 3.63 million in Khyber Pakhtunkhwa (KP) and 3.13 million in Balochistan province.
Speaking at an event titled “National Conference on Education Emergency,” Sharif said enrolling millions of children back into schools was a “tall order” that could be achieved with conviction.
“I declare from this moment an emergency in education all over Pakistan,” Sharif told members of the conference, which included federal ministers, parliamentarians, vice-chancellors, and diplomats.
The Pakistani prime minister said he would personally oversee the national program, adding that he would meet the chief ministers of all four provinces in the country for the sake of Pakistani children and their future.
“This is about our children and our future,” Sharif said. “This is a very challenging task, no doubt. But nations which had faced difficulties and defeat in the past arose from the ashes of defeat.”
He hoped provincial governments in Pakistan would help the center in achieving its goal of promoting education in the country and transforming it into an educated nation.
“I guarantee, if we move in unison to find our space, Pakistan will become one of the most educated societies one day soon,” he remarked.
Pakistan’s first lunar satellite ICUBE-Q successfully enters moon’s orbit
- ICUBE-Q was deployed in moon’s orbit around 1:14 p.m. Pakistan Standard Time, says Institute of Space technology official
- IST official describes development as “important” one for Pakistan allowing it to conduct “bigger” space missions in future
Islamabad: Pakistan’s first lunar satellite ICUBE-Q entered the moon’s orbit successfully today, Wednesday, a senior official of the country’s Institute of Space Technology (IST) confirmed, saying the “important” development could pave the way for “bigger” space missions for the country in the future.
The ICUBE-Qamar satellite carries two optical cameras to image the lunar surface and weighs around 7kg. Cubesats are tiny box-shaped satellites that are mainly launched into low Earth orbit to observe the Earth, test new communications technology, or perform miniature experiments.
Pakistan’s first lunar satellite was launched aboard China’s Chang’e-6 probe on May 3. The Chinese probe is tasked with landing on the far side of the moon, which perpetually faces away from the Earth, after which it will retrieve and return samples. China is the first country to make such an ambitious attempt.
“Our ICUBE-Q was deployed successfully in its orbit at 1:14 p.m. Pakistan Standard Time,” Dr. Khurram Khurshid, the head of the electrical engineering and computer science department at IST and a co-lead on the satellite project, told Arab News.
Dr. Khurshid said Pakistani officials will continue to test the satellite’s system for the next three to four days. He said initial tests revealed there were no complications with the cubesat’s system.
The IST official said the development means Pakistan is officially in an exclusive club of countries that have conducted deep space missions.
“This is the first step, a step in the right direction,” Dr. Khurshid noted. “It can lead to bigger space missions, such as landing on the moon or various other experiments.”
Dr. Khurshid said Pakistan would be able to share images from the satellite by May 15.
Around 100 students from IST contributed to developing the satellite. Pakistan’s proposal to build the satellite was accepted by the China National Space Agency (CNSA) from plans submitted by eight member states of the Asia-Pacific Space Cooperation Organization (APSCO).
The design, development, and qualification of the ICUBE-Q satellite were spearheaded by faculty members and students of the IST in collaboration with China’s Shanghai Jiao Tong University (SJTU), with support from Pakistan’s National Space Agency, SUPARCO.
The ICUBE-Q has two cameras as payload for taking images of the lunar surface that will be transmitted back to Earth for analysis.
