Positive sentiments expressed by the government about the next bailout loan from the International Monetary Fund (IMF) notwithstanding, the facts give a different story.
According to the Ministry of Economic Affairs’ monthly disbursement report, Pakistan was unable to secure $9 billion in debt rollovers in July, receiving only $426 million from international lenders. As an article in Tribune stated, “rollover of Chinese, Saudi Arabian, and United Arab Emirates cash deposits, along with raising new loans from foreign commercial banks, are prerequisites for the International Monetary Fund’s (IMF) approval of a $7 billion bailout package.” As of now the IMF has deferred approval of the bailout program due to the government’s inability to secure the necessary rollovers.
Pakistan’s hope is that it can finalize the sale of 15% shares in Reko-Diq mining project to Saudi Arabia and that might ensure that Saudi Arabia expedites Pakistan’s request for $5 billion rollover and approves an additional $1.2 billion oil financing facility.
There is growing concern that if the IMF approval is delayed until October, the international lender might demand a mini budget before approving the loan package to cover any tax collection shortfalls. That will create further challenges for the PML-N led government that is already facing public anger over the continuing economic hardship.
