PM Sharif says Pakistan needs another IMF bailout of up to three-year duration

Pakistan Prime Minister Shehbaz Sharif (center) chairs a meeting of the Special Investment Facilitation Council’s apex committee in Islamabad, Pakistan, on March 21, 2024. (Government of Pakistan)
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Updated 21 March 2024
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PM Sharif says Pakistan needs another IMF bailout of up to three-year duration

  • Pakistan’s ongoing $3 billion stand-by arrangement with IMF expires on April 11
  • After successful review, last disbursement of $1.1 billion of current bailout expected next month

ISLAMABAD: Prime Minister Shehbaz Sharif said on Thursday that Pakistan needed another long-term bailout from the International Monetary Fund (IMF) and structural reforms to stabilize its fragile $350 billion economy in the long run. 

The Pakistani premier’s comments came a day after the South Asian country signed a staff-level agreement with the international lender, which would see the disbursement of $1.1 billion for Islamabad next month. 

Pakistan and the IMF agreed to a stand-by arrangement (SBA) in 2023, a last-gasp deal secured by Islamabad to avoid a sovereign default. The arrangement expires on April 11 and the IMF has said it would formulate a medium-term program if Islamabad applies for it.

“We have to take this macro-level stability forward,” Sharif told a meeting of the Special Investment Facilitation Council’s apex committee on Thursday. 

“And it is inevitable that without another agreement [with the IMF], we cannot survive.”

Sharif, however, said another IMF program would not ensure that Pakistan’s growth trajectory increases significantly.

“This program whose duration could be two to three years, we have to bring deep-rooted, structural reforms with it,” he said, adding that failure to do so would not stop Pakistan’s economy from “bleeding” badly. 

The prime minister sought the support of all political parties and provincial governments to successfully implement an agenda that ensures macroeconomic stability in Pakistan. 

“For this we will have to work together,” he said. “With the support of all the provinces, we will together resolve all the challenges and difficulties faced by the country.” 

Pakistan’s debt-ridden economy has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23 percent, policy interest rates at 22 percent and record depreciation of its currency. 

A shaky coalition cobbled together by Sharif’s Pakistan Muslim League-Nawaz (PML-N) featuring representatives of other political parties in the cabinet, will have to take tough economic decisions to commit to a new IMF program.

This would mean taking steps needed to stay on a narrow path to recovery, limiting policy options to provide relief to a deeply frustrated population and catering to industries that are looking for government support to spur growth. 


Deputy PM’s post an honorary one sans any office, Pakistani court told 

Updated 8 sec ago
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Deputy PM’s post an honorary one sans any office, Pakistani court told 

  • Islamabad High Court hears plea challenging Ishaq Dar’s appointment to deputy PM post
  • Defense counsel urges court to form larger bench to address cases of dual appointments

ISLAMABAD: Pakistan’s Cabinet Division on Wednesday informed a Pakistani high court that the deputy prime minister’s post was an honorary one and that no “special office” had been established for it, the state-run Associated Press of Pakistan (APP) said in a report. 

Islamabad High Court (IHC) Chief Justice Aamir Farooq was hearing a plea filed by Sher Afzal Marwat, a leader of former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party. Marwat had challenged Deputy Prime Minister and Foreign Minister Ishaq Dar’s appointment to the post in April. 

Marwat’s plea filed last month said Dar was already holding the office of the federal minister for foreign affairs when the cabinet division issued a notification on April 28 with Prime Minister Shehbaz Sharif’s approval for his appointment to the post. 

It argued that the prime minister’s office was a constitutional one but the post of deputy premier was not known in Pakistan’s constitution and no other law allowed the cabinet division to issue such a notification. Dar’s appointment as deputy premier was made for “personal reasons” at the “cost of public exchequer,” the petition argued. 

“The Cabinet Division on Wednesday informed the Islamabad High Court (IHC) that the designation of deputy prime minister was an honorary post, and no special office had been established in that regard,” APP reported. 

The Defense counsel, Riaz Hanif Rahi, said Dar’s appointment as deputy prime minister was honorary and urged the court to form a larger bench to address dual appointment cases in the interest of good governance. Subsequently, the court adjourned the hearing.

Dar, who is a former four-time finance minister of Pakistan, was earlier made the head of a special committee of PM Sharif’s cabinet on privatization before he was appointed deputy premier.

The 73-year-old chartered accountant is considered to be the closest ally of PM Sharif’s elder brother, Nawaz Sharif, who is also a three-time former prime minister

Political analysts at the time believed Dar’s appointment to the post was an indication that Nawaz was trying to assert his control of the government indirectly.

Before Dar, Chaudhry Pervaiz Elahi was appointed the deputy prime minister of Pakistan in 2012.


Pakistan sets big Rs13 trillion revenue target for year to June 2025

Updated 12 June 2024
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Pakistan sets big Rs13 trillion revenue target for year to June 2025

  • Pakistan presents federal budget to strengthen case for new IMF loan agreement
  • Pakistan has projected sharp drop in fiscal deficit for new financial year at 5.9 percent of GDP

ISLAMABAD: Pakistan has set a challenging tax revenue target of 13 trillion rupees ($46.66 billion) for the year starting July 1, a near 40 percent jump from the current year, to strengthen the case for a new bailout deal with the International Monetary Fund.
The ambitious revenue targets for the fiscal year through June 2025 were in line with analyst expectations.
Key objectives for the upcoming fiscal year included bringing the public debt-to-GDP ratio to sustainable levels and prioritising improvements in the balance of payments position, the government’s budget document showed.
Pakistan has projected a sharp drop in its fiscal deficit for the new financial year at 5.9 percent of GDP, from an upwardly revised estimate of 7.4 percent for the current year.
GDP would expand 2.4 percent in the current year, missing the budgeted target of 3.5 percent, the government said in its economic review on Tuesday, despite revenues being up 30 percent on the year, and the fiscal and current account deficits being under control.
Pakistan will look to widen the tax base to avoid burdening existing tax payers to meet its targets, Finance Minister Muhammad Aurangzeb said while presenting the budget.
While Pakistan is expected to stick to fiscal prudence under a new IMF program, growth will stay constrained, said Abid Suleri of the Sustainable Development Policy Institute think tank.
“Many of the measures taken to achieve fiscal sustainability will impact growth negatively, at least in the near future,” he said.
Pakistan is in talks with the IMF for a loan of about $6 billion to $8 billion, as it seeks to avert a default for an economy growing at the slowest pace in the region.
But a recent economic uptick, falling inflation and an interest rate cut on Monday have stirred government optimism over the prospects for growth.
The key policy rate could fall further this year and economic growth would continue to rise, Aurangzeb had told reporters a day before presenting his first budget.


Pakistan’s T20 World Cup fate hangs in balance as India face US

Updated 12 June 2024
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Pakistan’s T20 World Cup fate hangs in balance as India face US

  • Pakistan need US to lose their remaining two matches against India, Ireland to stay alive
  • Babar Azam’s side lost their opening two matches against India, US in this year’s World Cup

ISLAMABAD: Millions of Pakistani cricket fans will be hoping their arch-rivals India thump the United States on Wednesday when the two sides meet in New York for a T20 World Cup competition so that the green shirts stay alive in the tournament. 

Pakistan, who notched their first win of the T20 World Cup 2024 against Canada on Tuesday night in New York, need the US to lose their remaining two matches against India and Ireland. Skipper Babar Azam’s side, who lost to the US and India in their opening two matches of the World Cup, also need India to beat Canada on June 15 to stand a chance in the tournament. 

If the US wins even one more point, Pakistan’s journey in the World Cup will come to an abrupt end in the first stage. Even one match affected by rain would spell the end for Pakistan, as the US requires only one point to move to the second round.

“USA bracing up for another epic clash,” the International Cricket Council (ICC) wrote on social media platform X. It shared a picture of the American cricketers practicing before the fixture. 

Pakistan’s new white-ball coach Gary Kirsten last week bluntly said the green shirts needed to evolve if they wanted to live up to the standards of international cricket. 

“I think for me the most important thing for every international player is that you continue growing and developing as a player, and understanding what the demands of international competition are,” Kirsten said at the post-match conference after Pakistan lost to India on Sunday. 

“The game is changing pretty much every year. So, if you’re not up to it and you’re not improving, you’re going to get found out somewhere.”

Squads:

India (probable): 1 Rohit Sharma (capt), 2 Virat Kohli, 3 Rishabh Pant (wk), 4 Suryakumar Yadav, 5 Shivam Dube, 6 Hardik Pandya, 7 Ravindra Jadeja, 8 Axar Patel, 9 Jasprit Bumrah, 10 Mohammed Siraj, 11 Arshdeep Singh

USA (probable): 1 Steven Taylor, 2 Monank Patel (capt & wk), 3 Andries Gous, 4 Aaron Jones, 5 Nitish Kumar, 6 Corey Anderson, 7 Harmeet Singh, 8 Jasdeep Singh, 9 Nosthush Kenjige, 10 Saurabh Netravalkar, 11 Ali Khan 


Pakistan unlikely to buy spot LNG in summer despite simmering heat

Updated 12 June 2024
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Pakistan unlikely to buy spot LNG in summer despite simmering heat

  • Pakistan unlikely to buy LNG cargoes until November due to oversupply, high prices
  • Countries seek more LNG cargoes due to extreme heat, driving spot prices to high levels

KARACHI: Pakistan is unlikely to buy liquefied natural gas (LNG) cargoes on the spot market until at least the beginning of winter in November due to oversupply and high prices, its petroleum minister told Reuters.

Extreme temperatures across Asia have pushed countries to seek more cargoes of LNG to address higher power demand, driving spot prices to their highest since mid-December. Asia spot LNG last traded at $12.00 per million British thermal units (mmBtu) on Friday.

However, LNG demand in the second largest South Asian LNG buyer was “subordinate to supplies,” the minister told Reuters, despite heatwaves baking the country of 300 million people with temperatures surging to a near-record.

“The question of getting more LNG when we can’t sell the amount of LNG that we already are obtaining from our long-term contracts, it does not apply,” Musadik Masood Malik, Pakistan’s petroleum minister, told Reuters in an interview.

Annual power use in Pakistan, which gets over a third of its electricity from natural gas, is expected to fall consecutively for the first time in 16 years, due to higher tariffs curbing household consumption.

Poor and middle-class households are still feeling the impact of the International Monetary Fund’s (IMF) bailout of Pakistan last year, which contributed to higher retail prices. A series of power tariff hikes over 12 months was a key part of the IMF program which ended in April.

Industrial demand has also remained tepid due to a cloudy economic outlook.

Pakistan, which last bought a spot LNG cargo in late 2023, canceled its spot LNG tender for delivery in January. Malik attributed the cancelation to oversupply, adding that there were “not a lot of customers” at current LNG spot prices.

Malik said Pakistan was keen to adopt more renewable energy to cut its import bill and exposure to geopolitical shocks. The country suffered widespread power outages due to its inability to buy expensive LNG after prices surged due to Russia’s invasion of Ukraine.

“Any country that is importing $15-18 billion of fuel, how can it be sustainable when the total exports are south of $30 billion? So we have to move away from the imported elements such as LNG,” he said.

Pakistan was also trying to access less expensive natural gas by building a pipeline with Iran, but was wary of sanctions, he said.

“We basically are trying to work out the solution whereby we can have access to less expensive gas, but in a manner which does not invoke any sanctions on Pakistan. It all depends on legal interpretations,” he said.

“From our perspective, we don’t want to get into litigation and we don’t want to get sanctioned.” 


Pakistan, Muslim World League to host global conference on girls’ education in September

Updated 12 June 2024
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Pakistan, Muslim World League to host global conference on girls’ education in September

  • Eminent scholars, education ministers from Islamic countries to attend three-day event
  • Event to explore solutions to various barriers to education millions of girls face daily 

ISLAMABAD: Pakistan’s government will join hands with the Muslim World League to host a “landmark” global conference on girls’ education in September, state-run media reported on Wednesday, to ensure girls have better access to education and other facilities. 

According to the Malala Fund, 12 million girls are out of school in Pakistan and only 13 percent of girls advance to grade IX. The international non-governmental organization says social norms such as gender stereotypes and preference for educating boys continue to prevent girls from accessing education. 

State broadcaster Radio Pakistan said the primary objective of the three-day conference is to “explore and formulate” effective strategies to enable institutional responses and ensure better resource allocation for promoting girls’ education on a global scale.

“This event aims to bring together a diverse group of international and national dignitaries, including education ministers from numerous Islamic countries, to address and find solutions to different challenges faced by girls in the education sector,” Radio Pakistan said. 

It said eminent scholars, education experts, policymakers and various other stakeholders are expected to attend the conference. They will share their expertise, experiences, and best practices in the field of girls’ education. 

“The event will serve as a crucial platform for sharing experiences, discussing the multifaceted challenges faced by girls in accessing education, and exploring innovative solutions to overcome these barriers,” Radio Pakistan explained. 

It said PM Sharif has constituted a dedicated committee to organize the event in a “befitting and efficient manner.” 

The state-run media said the committee is headed by Secretary of Education Mohyuddin Wani and includes lawmaker Nausheen Iftikhar, representatives from the foreign office, the federal directorate of education and the Capital Development Authority (CDA). 

“This event marks a significant step toward the global promotion of girls’ education, demonstrating Pakistan’s commitment to being at the forefront of this vital initiative,” Radio Pakistan said. 

“By hosting such a crucial conference, Pakistan aims to contribute substantially to the global dialogue on education and help forge a path toward a more inclusive and equitable educational landscape for girls worldwide.”