PM Imran, IMF chief Lagarde scheduled to meet on April 26

F.P. Report

ISLAMABAD: The meeting between Prime Minister Imran Khan and International Monetary Fund (IMF) Managing Director (MD) Christine Lagarde has been scheduled for April 26.

The meeting between Prime Minister Imran Khan and IMF MD Christine Lagarde will be held in China during his visit.

During the meeting, matters of mutual interests and other issues are likely to be discussed.

Meanwhile, a mission team from the International Monetary Fund (IMF) will travel to Pakistan this month, the IMF said April 15, amid growing expectation that talks on a long-delayed bailout are due to be wrapped up soon.

Pakistan was last year expected to sign up for its 13th IMF bailout programme since the late 1980s but talks ground to a halt, with Pakistani officials saying the conditions attached to the proposed IMF loans could hurt economic growth.

Pakistan’s macroeconomic outlook has deteriorated in recent months, with the central bank lowering growth forecasts and raising rates at a time when inflation is at a five-year high. The rupee currency has also lost about 35 percent since December 2017.

“At the request of the authorities, an IMF mission will be going to Pakistan before the end of April to continue the discussions,” the IMF said in a statement.

Former finance minister Asad Umar earlier this month visited Washington for talks with the IMF, which described those talks as “constructive discussions”.

The government of Prime Minister Imran Khan, who took power in August, has obtained temporary relief from close allies such as China and Saudi Arabia with short-term loans worth more than $10 billion to buffer foreign currency reserves and ease pressures on the country’s current account.

But analysts have been saying an IMF bailout is inevitable, with Pakistan also facing an increasing fiscal crunch ahead of the annual budget spending review for the next financial year starting July 1. “After today’s IMF statement, the expectation is that the bailout is pretty much there,” said Saad Hashemy, Chief Economist for Pakistani brokerage house Topline Securities.

But he added that there are questions regarding the time frame of when Pakistan would start receiving the money and the exact contours of the assistance programme. “There are questions if there will be any further devaluations, how much interest rates will be hiked, what taxation measures are expected of Pakistan, and will there be any further increase in electricity or gas prices?” Hashemy added.

Khan’s government is facing increasing anger from the population on the back of rising utility prices, many of which have been subsidized by successive cash-strapped governments.

Inflation was over 9.4 percent in March, its highest since November 2013, with strong increases in food and energy, the two most sensitive items for most consumers. The central bank forecasts growth at 3.5 to 4 percent in the 12 months to end-June, well off a government target of 6.2 percent.