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ISLAMABAD: The first day of talks between Pakistani officials and a delegation of the International Monetary Fund concluded in Islamabad on Thursday, sources within the Ministry of Finance informed Geo News.
Pakistan and the International Monetary Fund (IMF) team will have to assess the gross financing requirements for the ongoing fiscal year 2018-19 before Islamabad can decide whether or not to apply for the balance of payments bailout programme, media has learnt.
The visiting IMF staff team, which arrived here yesterday, led by Herald Finger, kick-started negotiations with Pakistan’s economic team. It would remain in Islamabad until the end of next week.
The sources said that Thursday’s talks were post-programme and staff-level, adding that similar rounds of talks were held in Washington during the tenure of caretaker government.
The federal government and the IMF team would review all issues pertaining to the Pakistani economy, including the mini-budget unveiled by the government to contain the budget and current account deficits. Estimates for both figures would be worked out by the two sides to evolve a consensus.
The talks will continue for a week, the sources said, adding that Thursday’s meeting reviewed the challenges facing Pakistan.
The IMF mission is also expected to hold talks with officials of the ministries of finance, trade, petroleum, investment and power.
They will also meet officials of the Federal Board of Revenue (FBR), sources said.
Regarding the IMF mission’s visit, Finance Minister Asad Umar during an interview last week said, “We are in discussion with them, but this is not to negotiate for a loan. Our purpose is to do our homework, in case we want to approach them at some stage.”
“The Ministry of Finance has assessed that the gross financing requirement of the country would range between $26-$29 billion during the current fiscal year, but the IMF team would give its assessment after gauging the economic health of the country during the Article IV consultations,” a top official of the government told The News.
The official said that the monthly current account deficit peaked at $2.2 billion in July, but contracted to $600 million in August. The assessment of gross financing requirement could not be ascertained on the basis of figures for a couple of months, he said.
Umar also dispelled the notion that Pakistan is facing a financial emergency and said that there is no need to rush to the IMF for a bailout.
“Pakistan is not in an emergency situation that requires it to rush to the IMF to seek a bailout,” the finance minister said during an interview with Arab News.
“We have neither stopped imports nor imposed financial sanctions,” he continued.
However, the finance minister emphasized, “We need to take well-measured decisions. As a situation emerges, we take steps to manage it. We don’t want to take decisions in emergency.”
“The government would have to take a formal decision on approaching the International Monetary Fund within one-and-a-half months,” the official said. Depending on the outcome of the talks, it would be determined who from among the Minister for Finance Asad Umar, Secretary Finance Arif Ahmed Khan and State Bank of Pakistan Governor Tariq Bajwa would attend the annual meetings of the IMF and World Bank in Bali, Indonesia from October 8-14, for further talks.