KARACHI: A final agreement on a financial assistance package from the International Monetary Fund will be announced on Monday, a top Pakistani government official said on Saturday, as talks continued to chalk out the final details of a bailout at a time of worsening economic outlook for the South Asian nation of 208 million people.
The long-delayed rescue package would be Pakistan’s 13th IMF bailout program since the late 1980s.
A visiting IMF team was expected to wind up negotiations by May 10 but the finance ministry announced on Friday night that talks would continue over the weekend.
“The talks will continue for two days (Saturday and Sunday),” Yousaf Baig Mirza, Special Assistant to the Prime Minister on Media, told Arab News. “The final outcome will be on the day after tomorrow (Monday).”
Prime Minister Imran Khan has called a meeting on Monday to review a draft of the deal, local media reported.
Khan, who assumed power in last August, inherited a wobbly economy but has faced growing criticism for failing to steady the ship. He has also been frustrated by low tax-collection rates.
Last month he carried out a sweeping cabinet reshuffle, including appointing experienced technocrat Abdul Hafeez Shaikh as his new de facto finance chief after removing Asad Umar. This month, Khan also changed the central bank governor and tax collection chief.
One of the key sticking points during the IMF bailout discussions so far has been how to manage the local rupee currency, whose exchange rate the central bank underpins in a de facto managed float system. But the country has been burning through its foreign currency reserves to defend the rupee.
Pakistan reportedly has agreed in latest talks to implement a flexible exchange rate, hike the policy rate, withdraw subsidies, reignite a privatization program, and curtail borrowing from the central bank.
The central bank in March cut its economic growth estimates, forecasting the economy would expand 3.5 to 4 percent for the year to the end of June, well short of a government target of 6.2 percent. The IMF paints a gloomier picture, predicting growth of 2.9 percent in 2019 and 2.8 percent next year.
Pakistan’s consumer price inflation in March rose to its highest since November 2013, hitting 9.41 percent year-on-year, before easing to 8.82 percent in April.
Outcome in IMF bailout talks expected on Monday, Pakistan says
Outcome in IMF bailout talks expected on Monday, Pakistan says
- Long-delayed package will be Pakistan’s 13th IMF bailout since the late 1980s
- PM Khan calls meeting on Monday to review draft of deal
Pakistan sends vessels to Saudi, UAE ports to secure crude supplies amid regional crisis
- The development comes as countries scramble to secure energy supplies amid US-Israeli strikes on Iran and Tehran’s counterattacks
- If Islamabad arranges, Aramco has assured a large crude carrier can be loaded at Yanbu and stationed near Pakistan, minister says
ISLAMABAD: Pakistan has sent vessels to ports in Saudi Arabia and the United Arab Emirates to secure crude oil supplies, the Pakistani petroleum minister said late Friday, as tensions in the Middle East continue to threaten global energy flows.
Global oil markets have been rattled since the United States and Israeli began pounding Iran last week, prompting retaliatory strikes from Tehran across the region. The conflict has raised fears of disruptions in energy supplies, particularly through the Strait of Hormuz, and pushed petroleum prices.
Pakistani Petroleum Minister Ali Pervaiz Malik and others said Islamabad was monitoring international energy markets and domestic supply conditions as they announced a hike of Rs55 ($0.20) per liter in petrol and diesel prices, promising to bring down the prices as soon as the conflict is resolved.
Describing the situation as “extraordinary,” Malik said they did not know how long the Middle East crisis would last and it was important to stretch Pakistan’s available petroleum reserves as much as they could to ensure a steady supply to consumers during the crisis.
“At the regional and global level, you can clearly see that countries are scrambling to secure energy supplies. Pakistan is also part of this effort because a significant portion of our energy supplies comes through the Strait of Hormuz,” he said, adding that Prime Minister Shehbaz Sharif has engaged the Saudi government to secure alternative sources.
“With the help of the Foreign Office, two Pakistan National Shipping Corporation (PNSC) vessels are currently on their way, one toward Yanbu port and the other toward Fujairah port, to bring crude oil from outside the Hormuz region in order to meet Pakistan’s energy needs.”
In addition, he said, Aramco had assured that if Pakistan arranged, a Very Large Crude Carrier (VLCC) can be loaded at Yanbu and stationed near the Pakistani waters.
“From there, PNSC (Pakistan National Shipping Corporation) feeder vessels will ensure a continuous supply of crude oil to our refineries, so that even during this difficult phase Pakistan’s energy requirements continue to be met,” Malik shared.
The statement came as long queues of vehicles were seen outside petrol stations nationwide as Islamabad moved to raise petroleum prices to keep the supplies in check.
Pakistan, which relies heavily on imported fuel to meet its energy needs, is particularly vulnerable to global oil price shocks that can quickly feed into inflation and pressure the country’s external accounts.
Officials at Friday’s presser said Pakistan, which reviews petroleum prices fortnightly, will be considering them more frequently, potentially on a weekly basis, and any reduction in global oil prices would be passed on to consumers.
Finance Minister Aurangzeb said a high-level government committee formed by PM Sharif had been meeting daily to review developments in global petroleum markets and their potential impact on Pakistan’s economy.
“Pakistan currently maintains adequate energy stocks and macroeconomic stability,” Aurangzeb said, adding that the government’s response was based on preparedness rather than panic.
