Business

Pakistan moves closer to securing IMF deal as UAE likely to commit funds soon

Published

2 years ago

Farwa

IMF likely to get written guarantee from UAE this week.
Matters have been finalised with UAE authorities, sources say.
Finance secretary will inform IMF officials about the development.

ISLAMABAD: Pakistan is moving closer to securing its loan from the International Monetary Fund (IMF) as United Arab Emirates (UAE) is likely to assure the global lender that it will provide a $1 billion financing to help the nation avoid a default by this week, Geo News reported citing sources.

The sources said that the UAE is likely to provide a written guarantee regarding $1 billion financing this week and the news will be conveyed to the Fund officials by the Finance Secretary Hamed Yaqoob Sheikh during the annual meeting currently being held in Washington.

The IMF has asked Pakistan to secure assurances on external financing from friendly countries and multilateral partners to fund its balance of payment gap for this fiscal year, which ends in June.

Last week, Saudi Arabia pledged $2 billion and informed the IMF it will provide financing to Pakistan. However, the agreement with the IMF still rests on a similar commitment from the UAE for a $1 billion loan.

Well-placed sources in the Ministry of Finance confirmed that matters have been finalised with the UAE and as as soon Pakistan receives a written guarantee from the Washington-based lender will receive confirmation.

The development comes after Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar requested the UAE officials in order to complete the prerequisites of the Fund.

The cash-strapped nation of 220 million people is going through one of its biggest economic crises in history as it raised interest rates to an all-time high after consumer prices quickened to a fresh record.

IMF lowers growth forecast

Meanwhile, IMF has cut its growth forecast for the country to 0.5% from the 2% estimate earlier as the nation faces a dollar shortage, leading to supply chain disruptions and companies stopping production.

The Fund is also assessing the coalition government’s proposed fuel discount that it plans for lower income groups by raising fuel prices for wealthy motorists; however, the finance minister had said that IMF has been provided with all required information.

Dar — who cancelled his trip to Washington where he was scheduled to hold in-person meetings with the IMF officials on the sidelines — has time and again claimed that the staff-level agreement with the Washington-based lender would be reached soon; however, the claims have proved to be futile.

Islamabad has been hosting an IMF mission since late January to negotiate a series of policy measures to secure $1.1 billion in funding for the cash-strapped economy, which is on the verge of collapse.

The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical for Pakistan to avert defaulting on external payment obligations.

The deal will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to four weeks’ worth of import cover, and help it steer out of a balance of payment crisis.

Business

Pakistan suffers a loss of millions due to inoperable airports.

Published

3 days ago

Farwa

The Pakistani economy is strengthening and trending in the right direction, according to Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb on Thursday.

Speaking at the Pakistan Saudi Arabia Business Forum, Aurangzeb stated that the goal of the government was to support the private sector rather than engage in commerce. His goal was to encourage business-to-business (B2B) trade and investment, thus he welcomed the delegation from Saudi Arabia.

Within the last 12 to 14 months, the minister saw a considerable improvement in macroeconomic stability. With the help of foreign exchange reserves sufficient to cover two months’ worth of imports, Pakistan steadied its currency, decreased its current account deficit to less than $1 billion, and produced a primary surplus.

Strong remittances, expanding exports, and a drop in inflation from 38% to 6.9% have all contributed to the consolidation of these benefits, according to Muhammad Aurangzeb. Companies have also profited from the insurance rate reduction.

Even if Pakistan’s credit rating has improved, more work needs to be done to bring it up to at least a B-. Both on the debt and equity sectors, he claimed, institutional flows were returning to the nation.

As the International Monetary Fund (IMF) board approved an extended program for the nation, the Islamabad Stock Exchange set a record high.

He stated that the IMF program will implement structural reforms in addition to ensuring macroeconomic stability for the long run.

The government of Pakistan remains committed to structural changes, sustainable growth, and tax reform, as stated by Muhammad Aurangzeb.

Business

Pakistan’s economy is getting better, according to Muhammad Aurangzeb

Published

3 days ago

Farwa

The Pakistani economy is strengthening and trending in the right direction, according to Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb on Thursday.

thus,Speaking at the Pakistan Saudi Arabia Business Forum, Aurangzeb stated that the goal of the government was to support the private sector rather than engage in commerce. His goal was to encourage business-to-business (B2B) trade and investment, thus he welcomed the delegation from Saudi Arabia.

As the International Monetary Fund (IMF) board approved an extended program for the nation, the Islamabad Stock Exchange set a record high.

He stated that the IMF program will implement structural reforms in addition to ensuring macroeconomic stability for the long run.

The government of Pakistan remains committed to structural changes, sustainable growth, and tax reform, as stated by Muhammad Aurangzeb.

Business

Remittances from Workers

Published

3 days ago

Farwa

In September of this year, the State Bank of Pakistan reported that remittances from overseas Pakistanis amounted to 2.8 billion dollars, reflecting a 29% increase compared to the remittances received in September of the previous year.

The SBP reports that, with a cumulative inflow of 8.8 billion US dollars in the first quarter of the financial year, workers’ remittances increased by 38.8 percent compared to the first quarter of the previous year.

Remittance inflows in September 2024 were primarily derived from Saudi Arabia at $681.3 million, the United Arab Emirates at $560.3 million, the United Kingdom at $423.6 million, and the United States of America at $274.9 million.