Pakistan to decide on IMF or Chinese bailout by end of Sept: Asad Umar

ISLAMABAD: Pakistan will decide on whether to seek a bailout from the International Monetary Fund or friendly nations such as China by the end of September, according to Asad Umar, the finance minister-in-waiting of the incoming government.

Asad Umar’s Pakistan Tehreek-i-Insaf (PTI) party is due to be sworn in to government around the middle of August and will immediately face a brewing economic crisis.

Pakistan’s foreign exchange reserves have plummeted over the past year and have been kept afloat by lending from China, which has deepened economic and diplomatic ties after pledging $57 billion in separate infrastructure loans for Pakistan. The rupee currency has been devalued four times since December.

Umar said he needs to see the latest government figures before he can speculate on the size of any bailout package, which analysts expect to exceed $10 billion. However, he added “no option, including an IMF programme, can be ruled out”.

“We have to evaluate all options in parallel,” Umar, 56, told reporters in Islamabad. “By end of September, I should be able to sit here and tell you this is the way we are going.”

While the economy is growing at 5.8 percent, the fastest pace in 13 years, Pakistan’s current account deficit widened 43 percent to $18 billion in the fiscal year that ended on June 30. The fiscal deficit has ballooned to 6.8 percent of the economy.