- Fund set to announce staff deal as early as this week: Qamar
- Lending resumption to give investors confidence, minister says
According to Bloomberg article published on February 22, 2023, Pakistan expects a $6.5 billion credit line from the International Monetary Fund will resume as soon as this week, helping attract investment and boosting the economy and trade, the commerce chief said.
Pakistan has taken all the steps needed to unfreeze the IMF funds and this should happen “any day now,” Commerce Minister Syed Naveed Qamar said in an interview in Washington.
The agreement will give investors and creditors confidence that “Pakistan’s economy is now stabilizing, has taken all the right steps, so in that sense their money will remain protected,” Qamar said. “The IMF program is the beginning, not the culmination, of all other monies flowing in.”
The World Bank sees Pakistan’s economic growth accelerating to 3.2% in the fiscal year through June 2024 from 2% in the current year, a period when catastrophic floods cost the economy billions of dollars.
A pickup in imports once the nation boosts its reserves will also benefit exports, the minister said. Limited foreign exchange reserves restricted Pakistan’s ability to fund imports, including intermediary goods, and stranded thousands of containers of supplies at ports.
Authorities have approved measures including higher taxes and energy prices to meet the key prescription’s from the IMF to win support.
Pakistan’s $348 billion economy is on the brink of a debt default. Severe supply shortages stoked inflation to a 48-year high in January and forced plant shutdowns, putting tens of thousands of jobs at risk.
The nation loosened its grip on the rupee last month, sending the currency to a record low against the dollar after a 15% slump in January. Amid the deteriorating finances, Pakistan’s credit rating was downgraded deeper into junk territory by Fitch Ratings for the second time in four months.
The weaker exchange rate also will help boost exports, Qamar said.
