INSUBCONTINENT EXCLUSIVE:
IMF experts to visit the country by the end of this month as its economy faced a balance-of-payments crisis, a media report said
today.Pakistan has decided to engage with the IMF after an in-house assessment found that the benefits of getting a bailout programme
outweigh the cost that the country may have to pay, including some compromises on economic sovereignty, the Express Tribune reported.A fresh
assessment by the State Bank of Pakistan (SBP) and the Finance Ministry showed that Pakistan needed USD 11.7 billion to service its external
debt in current fiscal year 2018-19.Pakistan's gross external financing requirements have been assessed at an alarming level of USD 31
billion by the finance ministry
This is based on the assumption that the current account deficit will touch USD 18.5 billion, the report said.After doing an in-house
analysis, spanning over two weeks, Pakistani authorities have decided to invite an International Monetary Fund staff-level team, the paper
quoted sources in the Ministry of Finance as saying.They said Finance Minister Asad Umar has already contacted IMF's Director for Middle
East and Central Asia Jihad Azour.Mr Umar told the paper that the IMF staff-level team would visit Pakistan by the end of this
month.Engagement with the IMF should not be directly linked with any kind of formal programme talks, said Mr Umar, while explaining the
purpose of the IMF team's visit.He said in case Pakistan plans on getting the IMF programme in future, the upcoming engagement would save
time that is often required for exchange and validation of macroeconomic numbers.The minister underscored that the IMF staff-level visit did
not mean Pakistan has decided to avail a bailout from the multilateral lender.Sources said the decision to invite the IMF staff-level team
was aimed at keeping both options open."The communication is happening all the time on a routine basis at different levels," said IMF
Resident Representative to Islamabad Teresa Daban.Quoting sources, the report said Pakistan Prime Minister Imran Khan's visit to Saudi
Arabia next week and follow-up visits by the Saudi monarchy to Islamabad will be a determining factor in taking a decision on whether to
avail an IMF bailout.They said that China was also helping Pakistan for protecting the China-Pakistan Economic Corridor (CPEC) deals from
scrutiny by external elements.Interestingly, US Secretary of State Mike Pompeo had warned in July that Washington had serious reservations
about the IMF giving money to Pakistan due to concerns Islamabad would use the cash to repay Chinese loans.The decision to request IMF to
send a staff-level mission was rooted in an in-depth assessment of Pakistan's gross external financing needs for fiscal year 2018-19 and
Bloomberg, Pakistan has availed 12 IMF bailouts since the late 1980s
The last one was in September, 2013 when the IMF approved a USD 6.6 billion loan support to Pakistan government's programme to stabilise its
economy and boost growth while expanding its social safety net to protect the poor.The administrative and regulatory measures that will be
taken may lower the current account deficit by about USD 4 billion to USD 14 billion, the sources said.Against USD 31-billion financing
requirements, the available financing is only USD 20 billion, which is inclusive of USD 13.2 billion projected borrowings and rollover of
USD 2.8 billion short-term debt, the sources said, adding this still left the government with a financing gap of USD 11.1 billion.An IMF
bailout could immediately avert the balance of payments crisis, the report said.This will also open cheap financing lines from the World
Bank and the Asian Development Bank (ADB), it said, adding, the programme will increase the country's credibility in the eyes of
international creditors.The government's internal assessment showed that the current level of foreign exchange reserve of USD 9.9 billion
was sufficient for only 1.8 months of import cover
These reserves are inclusive of USD 6.6 billion of forward swaps.In October 2016, Pakistan had USD 18.9 billion reserves that were enough to
provide import cover for four and a half months
But those reserves had been built by contracting expensive foreign loans, the report said.
