ISLAMABAD: Finance Minister Asad Umar’s bullish comments declaring the end of an economic crisis have bolstered confidence ahead of crunch talks with the International Monetary Fund (IMF) yesterday, but the country is still likely to need a bailout. Asad Umar said on Tuesday that “Pakistan’s immediate balance of payment crisis is over” without mentioning the talks with the IMF in Islamabad.
Umar’s comments came after Prime Minister Imran Khan visited main allies Saudi Arabia and China last month. Khan secured $6 billion in assistance from Riyadh while Beijing promised help cover a projected $12 billion shortfall in foreign exchange to service Pakistan’s debt.
Pakistan’s central bank chief is due to travel to China on Friday to discuss details of what Umar described as a pledge of “immediate money”.
Analysts say the cash will give the economy breathing space and stabilize the rupee, which has fallen 25 percent against the US dollar since December, but it will not solve Pakistan’s balance of payments crisis and avert a second IMF bailout request since 2013, and its 13th IMF rescue since late the 1980s.
“They are going to the IMF because they have to get credit rating approval from the financial markets and that would not happen on the Saudi or Chinese money,” Asad Sayeed, an economist at the Collective for Social Science Research, told media.