Mubasher: Pakistan would continue its discussions with the International Monetary Fund (IMF) after the two sides failed to reach an agreement on the terms of a bailout package.
A final deal is expected to be signed off by mid-January, finance ministry spokesman Noor Ahmed told Thomson Reuters on Tuesday, adding that there are still some issues to be resolved.
“We have covered a lot of areas in terms of convergence of views […] but there is some more distance to be covered and that’s not much,” Ahmed said.
Pakistan would remain “engaged” with the IMF officials to solve the sticking points, Ahmed said, adding that “over the next two weeks we will bridge those gaps.”
Pakistan is negotiating its second IMF bailout since 2013, and its 13th since the late 1980, to deal with a current account deficit, threatening to trigger a balance of payments crisis. Discussions were expected to conclude this month, during an IMF delegation visit to Islamabad.
The country is discussing a bailout worth around $6 billion with the international fund, local media outlets reported.
The Asian nation already devalued its currency five times, lowering its value by more than a quarter, while it raised its main policy rate by 275 basis points to 8.5% (bps) since last January.
Prime Minister Imran Khan has also managed to secure $6 billion in short-term loans from its ally Saudi Arabia, while China pledged to help, although Beijing did not disclose any amount.
The IMF is pushing Pakistan to make structural reforms to rebalance the economy, and curb spending which accelerated growth, but hurt the government budget.
Last month, the fund projected Pakistan’s economic growth to lose momentum, reaching 4% in the next year, and declining to 3% over the medium term.
It is worth noting that Pakistan’s growth hit 5.8% during the 12 months ended last June.
