Pakistan to resume stalled negotiations with IMF over $6 billion loan program today

A woman walks past the International Monetary Fund (IMF) headquarters building in Washington, U.S., on March 11, 2022. (AFP/File)
Short Url
Updated 18 April 2022

Pakistan to resume stalled negotiations with IMF over $6 billion loan program today

  • The top IMF official in Pakistan met Miftah Ismail on Friday ahead of the talks in Washington
  • IMF officials say they will support Pakistan amid a challenging global economic environment

KARACHI: The International Monetary Fund (IMF) and Pakistan are ready to resume stalled negotiations for the completion of the seventh review of a $6 billion loan program on Monday after initial contacts between Prime minister Shehbaz Sharif’s aide on finance and representatives of the international lending agency, officials said.

The two sides have been negotiating for the completion of the seventh review under the IMF’s Extended Fund Facility (EFF). However, their conversation stalled after the fund expressed its concern over a relief package amounting to $1.7 billion which was announced by the previous administration and included freezing of petroleum prices and cuts in electricity tariffs in response to rising inflation in the country.

The IMF said on Sunday its officials had met Miftah Ismail, who is expected to become Pakistan’s new finance minister, as part of its engagement with the country.

“As part of our continued engagement with Pakistan, the IMF Resident Representative met last Friday with the Finance Minister-designate Mr. Ismael, ahead of the visit of Pakistan’s delegation to Washington D.C. during the Spring Meetings,” Esther Perez Ruiz, the fund’s top official in Pakistan, told Arab News in a written response to a query on Sunday.

An official of the finance ministry, who declined to be named, said a Pakistani delegation were ready to resume talks with the fund officials in Washington.

Secured in 2019 to stave off balance of payment crisis, Pakistan has so far received about $3 billion from the fund under the $6 billion loan facility. The country expects to get another $1 billion after the successful completion of the seventh review under the program.

Pakistan has faced significant pressure on its foreign exchange reserves in recent months amid elevated global commodity prices and a recovery in domestic demand. The Russia-Ukraine military conflict, which has driven up global commodity prices, has also amplified pressure on its external position.

However, the IMF has expressed its resolve to support Pakistan on policies and reforms amid these challenges.

“The IMF looks forward to continuing supporting the Pakistani authorities on economic policies and reforms to ensure macroeconomic stability in Pakistan amidst the current challenging global economic environment,” Ruiz added.

According to the finance ministry, Pakistan achieved the targets agreed toward the end of December while progress on other actions mentioned in the Memorandum on Economic and Financial Policies (MEFP) for the 6th review were also found to be satisfactory during the initial talks with the IMF prior to the change of government in the country.

After the completion of technical talks, the MEFP text for the seventh review will come under discussion.

The IMF program is critical for Pakistan at a time when the country’s foreign exchange reserves have declined to about $10 billion and fiscal deficit is expected to hit a historic level.

The country’s current account deficit amounted to more than $12 billion between July 2021 and February 2022 in a stark contrast with the surplus of $1 billion during the corresponding period a year before.

Under the circumstances, Pakistan is expected to witness a widening of current account deficit to about five to six percent of its GDP.

Pakistani analysts believe the deviation from program objectives by the previous administration that introduced energy rate cuts and freezing of petroleum prices may cause a delay the IMF program completion.

The IMF facility was originally planned to finish after the ninth review which was scheduled for September 2, 2022.


Media watchdog demands Pakistan ensure safety as two reporters killed in two days

Updated 9 sec ago

Media watchdog demands Pakistan ensure safety as two reporters killed in two days

  • Gunmen killed Ishtiaq Sodharo of Sindhi weekly Chinag in Khairpur district in Sindh province on July 1
  • Iftikhar Ahmed from Daily Express shot dead in northwestern Pakistani district of Charsadda the next day

ISLAMABAD: The International Federation of Journalists (IFJ) on Tuesday demanded the Pakistani government ensure the safety of journalists, days after gunmen killed two reporters within two days in two separate incidents.

Unidentified assailants killed Ishtiaq Sodharo, associated with the Sindhi weekly Chinag, in Khairpur district of the southern Sindh province on July 1. A day later, Iftikhar Ahmed, a reporter for the Daily Express, was shot dead in the northwestern Pakistani district of Charsadda. Police are investigating the motive behind Ahmed’s death, including personal enmity, while Sodharo’s wife has alleged he was killed on the orders of a local policeman. 

The IFJ condemned the murders and called on the Pakistani authorities to fulfil their international obligations under Pakistan’s constitution to safeguard press freedom.

“Pakistan’s government must take appropriate measures to ensure journalists’ safety and security, as required by law, and act to reduce assaults on journalists so that they may carry out their work without fear,” the IFJ said in a statement on its website.

Pakistan is considered a dangerous country for journalists who often have to face violence, legal cases, abductions, detentions and threats from both state and non-state actors. 

In May, the country fell 12 points on the World Press Freedom Index from 145 in 2021 to 157 in 2022.


Pakistan concludes Hajj flights, all 83,312 pilgrims arrive in Saudi Arabia

Updated 56 min 16 sec ago

Pakistan concludes Hajj flights, all 83,312 pilgrims arrive in Saudi Arabia

  • 34,453 pilgrims traveled under government scheme and over 48,000 through private operators
  • 52 flights have utilized the Route to Makkah immigration facility at Islamabad airport this year

ISLAMABAD: Pakistan’s director-general of Hajj in Jeddah said on Tuesday the country’s Hajj flight operation was complete and all 83,312 Pakistani pilgrims had arrived in Saudi Arabia. 

One of Islam’s five main pillars of faith, the Hajj was restricted over pandemic fears to only 1,000 people living in the Kingdom in 2020 and to 60,000 domestic participants last year, compared with the pre-pandemic 2.5 million pilgrims annually. 

This year, after Saudi Arabia lifted COVID-19 restrictions, the kingdom will welcome one million domestic and foreign pilgrims. A quota of 81,132 pilgrims was initially allocated for Pakistan this year, which was later increased by 2,000.

“Our Hajj flights have been completed and all 83,312 Pakistani pilgrims have arrived in Makkah,” DG Hajj, Abrar Ahmed Mirza, told Arab News over the phone from Makkah.

He said 34,453 pilgrims had traveled under the government scheme and over 48,000 through private operators.

“We are now giving them training on Hajj rituals which are starting from Wednesday especially preparing them for Mina, Arafat, and Muzdalifah where pilgrims from all over the world move at the same time,” Mirza said.

Haseeb Ahmed Siddiqui, the director of the Hajj Complex in Islamabad, said 52 flights had utilized the Route to Makkah facility at Islamabad airport this year. 

The Route to Makkah initiative allows pilgrims to fulfil all immigration requirements at the airport of origin. This saves them several hours upon reaching the kingdom since they can enter the country, having already gone through immigration at home. 

“17,077 pilgrims proceeded to the Kingdom under Route to Makkah project using 52 flights this year,” Siddiqui told Arab News.

Adeel Ahmed, a pilgrim from Rawalpindi, said he had no words to express his happiness at being selected for the pilgrimage.

“My name was not part of the first draft and I got a chance at the last moment,” Ahmed told Arab News. “I am unable to share my feelings and happiness as Allah has granted me this privilege to fulfill my dream.” 

Sumera Kiran, another pilgrim from Rawalpindi, expressed satisfaction with arrangements at the airport.

“The [Saudi] government and Pakistani authorities have done very good arrangements at the airport,” she said, adding that she had received her luggage at the hotel.


Pakistan central bank may raise rates by 125 bps to tame 13-year high inflation

Updated 05 July 2022

Pakistan central bank may raise rates by 125 bps to tame 13-year high inflation

  • The South Asian nation is wrestling with economic turmoil, a fall in reserves and a weakening currency
  • Another hike would increase government debt servicing costs as well as hurt industries, says an economist

ISLAMABAD: Pakistan’s central bank looks set to raise its key policy rate by 125 basis points at its review on Thursday, as it attempts to tackle 13-year high retail inflation, according to the median estimate in a snap poll of 10 economists and market watchers. 

The economists, analysts and senior professors surveyed were widely split on the quantum of increase by the State Bank of Pakistan (SBP), with views ranging from 50 to 200 basis points. 

Two respondents did not see a need for a rate increase. 

The central bank raised the benchmark interest rate by 150 bps in May, taking the total increase to 400 bps so far this year to counter rising inflation. 

The South Asian nation is wrestling with economic turmoil, a fall in reserves and a weakening currency. 

Data on Friday showed consumer prices in June leapt 21.3 percent from a year earlier, largely on account of a 90 percent spike in fuel prices since the end of May after the government scrapped costly fuel subsidies. 

With the current policy rate at 13.75 percent and inflation running well above, real interest rates in the economy have turned sharply negative. 

“The last monetary policy committee statement is proof that the State Bank of Pakistan is way behind the curve on anticipating inflation,” said Yousuf Nazar, an economist who writes for various publications and formerly with Citigroup. 

“Another hike would increase government debt servicing costs as well as hurt industries. 

It is not going to have much of an impact on exchange rate or overall demand,” he added. 

Most believed a hike was inevitable, given persistently high global energy prices, the abrupt ending of fuel subsidies as well as the need to control demand after SBP said in its last policy statement the economy had rebounded much more strongly than anticipated. 

“The overall policy mix is geared toward stabilization and demand management,” CEO of Macro Economic Insights Sakib Sherani said, adding that this will induce a sharp slowdown in the economy, possibly a recession, in the short run. 

But Fahad Rauf, head of research at Ismail Iqbal Securities, said he does not see the need to increase rates further. 

“The economy is already slowing down. The layoffs have started and are expected to increase further. 

Further cost pressures would only enhance the burden on industries and workers,” Rauf said. 

“The fiscal arm is working now, tough measures have been taken. SBP needs to wait for the results before further tightening,” he added. 

With Pakistan expecting a restart of the much-awaited bailout package from the International Monetary Fund after the country agreed on some tough economic policy adjustments to promote stability, the SBP’s decision is being closely watched. 


Dubai-bound Indian airline plane makes ‘emergency landing’ in Karachi

Updated 54 min 53 sec ago

Dubai-bound Indian airline plane makes ‘emergency landing’ in Karachi

  • India’s SpiceJet airline says plane diverted to Karachi due to indicator light malfunctioning
  • The B737 aircraft landed at Karachi airport at around 9am where it’s currently being repaired

ISLAMABAD: A Dubai-bound Indian airline plane on Tuesday made an “emergency landing” in the southern Pakistani city of Karachi, the Pakistan Civil Aviation Authority (PCAA) said. 

The B737 aircraft flew from New Delhi for Dubai this morning, according to the PCAA. The pilot requested Pakistani aviation authorities for an “emergency landing” because of a fuel leak. 

“An aircraft of SpiceJet going from Delhi to Dubai sought permission for emergency landing which was granted and the aircraft with 138 passengers on board landed at Karachi airport after 9am today,” PCAA spokesman Saifullah told Arab News. 

“The aircraft was diverted to Karachi airport for landing after fuel leakage.” 

SpiceJet, however, said the plane was diverted due to “indicator light malfunctioning.” 

“No emergency was declared and the aircraft made a normal landing. There was no earlier report of any malfunction with the aircraft,” the airline said in a series of tweets. 

“A replacement aircraft is being sent to Karachi that will take the passengers to Dubai.” 

 

 

The PCAA spokesman said all passengers had been moved to the transit longue of the airport, where they were provided food and refreshments. 

“The aircraft is currently being repaired,” Saifullah added. 


England to tour Pakistan for first time in 16 years from September 15

Updated 05 July 2022

England to tour Pakistan for first time in 16 years from September 15

  • England and Wales Cricket Board security team expected in Pakistan later this month to assess arrangements
  • Tour originally scheduled to be played in Rawalpindi last October but England had called off their visit

ISLAMABAD: Lahore and Karachi are likely to host seven T20Is between Pakistan and England from September 15 to October 2, ESPN cricinfo reported on Monday, quoting the Pakistan Cricket Board chairman. 

PCB is yet to announce the fixtures for the series, which will be the first instance of England touring Pakistan in 16 years. 

The England and Wales Cricket Board’s three-member security team is expected to arrive in Pakistan later this month to assess arrangements, the cricket website said. 

The matches were originally scheduled to be played in Rawalpindi last October but England had called off their visit, following New Zealand doing the same at the last minute over security issues. 

Though Pakistan have Multan and Rawalpindi as other venues to consider, PCB chairman Ramiz Raja said the schedule is “very tight and we can’t go elsewhere.” 

The upcoming series is significant as England have not toured Pakistan since 2005 and two of Pakistan’s home series in 2012 and 2016 were forced to be played in the UAE. 

After England decided to withdraw their men’s and women’s teams from tours to Pakistan last year, Raja had hit out at cricket’s “western bloc.” 

The ECB cited bubble fatigue and “increasing concerns about traveling to the region” to pull out of the series. 

Following the series with England, Pakistan will depart for New Zealand on October 4 to participate in a T20I tri-series (also involving Bangladesh) in Christchurch from October 7 to 14.  

England, meanwhile, will return to Pakistan following the 2022 T20 World Cup for a three-Test series in November as part of the World Test Championship. 

England’s new white-ball captain Jos Buttler last week said he did not expect to have his best team available for the series due to fixture congestion. England’s red-ball players are unlikely to be available at the start of the limited-overs series in Pakistan, with England’s third Test against South Africa due to finish on September 12.