IMF not formally approached by Pakistan for financial assistance: chief economist

NUSA DUA, Indonesia: International Monetary Fund (IMF) chief economist Maurice Obstfeld has said the fund has not been formally approached by Pakistan for financial assistance, and the country’s cooperation with China has both financial benefits and risks.

Obstfeld made the remarks at a press briefing during the Fund’s annual meetings held on the resort island of Bali in Indonesia, according to a wire service.

Yesterday, Minister for Finance Asad Umar said that the government had decided to initiate negotiations with International Monetary Fund (IMF) for the recovery and stabilization of national economy.

In a video message, the minister said that everyone was aware of the difficult economic conditions left by the previous government for the country. That was why; he said the Pakistan Tehrik-i-Insaf led government had decided to take measures to take the country out of the crisis.

Separately, the ministry said in a statement that the government, after taking into account the current situation and consultation with the leading economists, decided to approach the IMF for stabilisation and an “economic recovery program”.

It stated that after assuming power, the PTI government had expressed serious concerns on the dire economic situation of the country and had committed to undertake a quick evaluation of all possible options.

“The government inherited 6.6% of fiscal deficit, more than a trillion rupees of unaccounted for losses in the energy sector and an unprecedented and debilitating current account deficit running at $2 billion a month. To correct the underlying imbalances, fiscal and monetary actions needed to be undertaken without delay,” reads the statement.

The government maintained that Pakistan has availed ten IMF programs since 1990s in one shape or the other but the challenge for the current government is to ensure that fundamental economic structural reforms are carried out to ensure that “this spiral of demanding in an IMF program every few years is broken once and for all”.

“It is essential to remember that there is a history of Pakistan repeatedly going to the IMF with every new government being forced to go with IMF program due to legacy of those who held power in the previous government,” the ministry noted.

In order to avail the program, Finance Minister Asad Umar will hold meetings with the top leadership of IMF during the annual meetings of World Bank / IMF in Indonesia’s Bali city.