Dar leaves for US for annual meetings of IMF, World Bank
Finance Minister Ishaq Dar left for a visit to the United States on Tuesday, the finance ministry said.
During his visit, the minister will attend the annual meetings of the International Monetary Fund (IMF) and the World Bank. He is also expected to hold direct talks with their officials.
A day earlier, Dar reaffirmed Pakistan’s commitment to complete the IMF programme with all its conditions in an honourable manner and meet all repayment obligations to multilaterals, bond holders and Paris Club creditors.
He said the ninth review with the IMF was scheduled for October 25 and ruled out any consideration for renegotiating the IMF agreement when it was in the last leg of its completion.
He also shared that Pakistan was seeking a rescheduling of bilateral debt, which now stands at around $27 billion. However, he ruled out rescheduling of international debt from wealthy western nations under Paris Club, multilaterals and international sovereign bonds.
The minister said there was no point in Paris Club rescheduling debt because the overall debt to these creditors was no more than 11 per cent of total foreign debt and debt relief over the year would be less than $1.2bn. Pakistan owes Paris Club countries a combined sum of around $10.7bn.
“When we are going to arrange $32-34bn for external payments, another $1.2bn is no big issue,” Dar said.
The finance minister's visit comes as Pakistan deals with the aftermath of the devastating floods which have affected nearly 33 million people and displaced 7.9m.
The World Bank has forecast Pakistan's economic growth rate at 2pc this year and warned that 2.5 to 4pc of the population or about 10m people could fall below the poverty line owing to the combined impact of devastating floods and historic inflation.
IMF and PDL
Last month, the government had reduced the prices of all petroleum products for the next fortnight by around 5pc — reversing a policy of raising prices monthly through added levies to ensure enhanced revenues as agreed with the IMF.
Dar had said at the time that imposing additional levies was not justified as the country struggled with catastrophic floods that have inflicted at least $30bn in damages.
“I have been dealing with the IMF for the last 25 years; I will deal with it,” he said, referring to any potential reservations by the lender.
Dar’s statement had come in response to his predecessor Miftah Ismail’s criticism, who termed the move to slash fuel prices by reducing levy sans IMF approval as “reckless”.
The IMF's resident representative in Islamabad, Esther Perez Ruiz, had said in response to a question about the cut that policy commitments made by the government to resume the support programme continue to apply.
She had said policy discussions, including how to target support to those affected by the floods while maintaining macroeconomic stability, would commence in the coming weeks after the damage assessment report became available.