ISLAMABAD: Pakistan has not sent any formal request to the International Monetary Fund (IMF) for a new loan programme, sources close to IMF told Business Recorder. To a question asked by this scribe whether Pakistan has requested the Fund to defer or postpone repayments under the last Stand By Arrangement (SBA) programme, the sources said, "There has been no discussions of deferral or postponement of payments to the IMF.
Pakistan has an excellent record of paying its obligations to the Fund on time and in full, and it is being expected that this will continue in the future."
Sources revealed that there has been no formal request for new loan programme yet, so it would be premature to speculate on the details of any future financial arrangement. To a question as the last SBA programme under the Fund to Pakistan was suspended before the release of $11.3 billion amount pledged for the programme, would that pending amount be adjusted in the new loan programme, they said that the previous SBA had expired so the un-disbursed amount was no longer available. "The amount of any new loan arrangement would be independently determined according to the economic needs at that time," they added.
Sources in the Ministry of Finance told that in the absence of the Letter of Comfort (LoC) from the Fund, Pakistan has been deprived of programme lending from multilateral financial institutions like the Asian Development Bank (ADB) and the World Bank. "If the country enters into a new loan programme under the Fund, the programme lending that has been stopped during the last two and a half years, would then be restored to Pakistan," they added.
IMF Executive Board has concluded its First Post-Program Monitoring Discussions and the Ex-Post Evaluation of Exceptional Access under the 2008 Stand-By Arrangement with Pakistan dated November, 2012 in which it is noted: "Pakistan's economy faces many challenges. Deep seated structural problems and weak macroeconomic policies have continued to sap the economy's vigour. Real GDP growth over the past four years has averaged only about 3 percent annually, and is projected to be about 31/4 percent in 2012/13, insufficient to achieve significant improvement in living standards and to absorb the rising labour force. A key structural impediment to growth is the problems in the energy sector, which have resulted in widespread and unpredictable power outages. Headline inflation has decelerated recently, but is likely to return to low double digits by the end of 2012/13. The external position has weakened substantially, as export growth turned negative in 2011/12 while imports grew. The financial account has also deteriorated, reflecting weak financial inflows and debt repayments."