Pakistan-IMF deal due ‘any day’ to boost economy, says Naveed Qamar

Washington: IMF set to announce staff deal as early as this week and lending resumption will give investors confidence. Pakistan expects a $6.5 billion credit line from the International Monetary Fund which will resume as soon as this week, helping attract investment and boosting the economy and trade. Also, Pakistan has taken all the steps needed to unfreeze the IMF funds and this should happen “Any Day Now,” Commerce Minister Syed Naveed Qamar said in an interview in Washington.

The agreement will give investors and creditors confidence that Pakistan’s economy is now stabilizing and their money will remain protected. The IMF program is the beginning, not the culmination of all other monies flowing in. The World Bank sees Pakistan’s economic growth accelerating to 3.2% in the fiscal year through June 2024 from 2% in the current year, a period when catastrophic floods cost the economy billions of dollars.

A pickup in imports once the nation boosts its reserves will also benefit exports and limited foreign exchange reserves restricted Pakistan’s ability to fund imports, including intermediary goods, and stranded thousands of containers of supplies at ports.

Authorities have approved measures including higher taxes and energy prices to meet the key prescriptions from the IMF to win support. Pakistan’s $348 billion economy is on the brink of a debt default.

Severe supply shortages stoked inflation to a 48-year high in January and forced plant shutdowns, putting tens of thousands of jobs at risk. The nation loosened its grip on the rupee last month, sending the currency to a record low against the dollar after a 15% slump in January. Amid the deteriorating finances, Pakistan’s credit rating was downgraded deeper into junk territory by Fitch Ratings for the second time in four months and the weaker exchange rate also will help boost exports.