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IMF may resume aid by March-end

TAHIR DHINDSA

ISLAMABAD: The International Monetary Fund (IMF) is likely to resume assistance programme to Pakistan towards the end of March, top official sources told Business Recorder on Thursday.

The sources close to the IMF confirmed that a programme level mission will visit Islamabad during the last week of March for final negotiations on a new programme which has been named as Poverty Reduction and Growth Programme (PRGP). The programme will replace the $1.6 billion, Suspended Enhanced Structural Adjustment Facility (ESAF).

Any new releases of tranche will be made according to the schedule, but official sources hoped that a single tranche will be immediately released and made available in the lieu of that tranche of ESAF programme which was not released and the programme was practically suspended.

Although the exact size of the programme has not been finalised the official sources expect that it would be about $ 3 billion of soft term loan spread over three years.

The programme will have strong emphasis on social side. Government will spend maximum amount on poverty reduction side, whereas the ongoing structural adjustment process will continue.

Sources said, since the programme is aiming at improving economic efficiency the conservative benchmarks will continue to figure in the negotiation progress.

The official sources told Business Recorder that the Pakistan has lost almost $ 1.1 billion during the first seven months of the current financial year due to adverse terms of trade and the issue will be taken up with the IMF.

"We will take the issue with the Fund, because it is none of our fault that the current account deficit has swelled up so much," a top government official said, adding: "The issue will of carrying out domestic reforms positively and in good faith is more relevant."

Showing confidence in a favourable conclusion of negotiations with the Fund the sources said, recent trade figures are encouraging and supportive of government agenda, which is relevant to the programme.