Pakistan fails to convince IMF to release final tranche of $11.3bn loanApril 19th, 2011 - 1:50 pm ICT by ANI
Washington, April 19(ANI): The Pakistani delegation to the International Monetary Fund-World Bank spring meetings is set to return home without any agreement on the release of the final tranche of an 11.3-billion-dollar loan package to the country.
While Pakistan has already received over 7 billion dollars in five instalments, the 6th tranche remains suspended since May 2010 due to the country’s inability to meet the performance benchmarks attached to the standby arrangement.
“There are no indications that the delegation was able to convince the IMF to release the next tranche,” the Dawn quoted a diplomatic source, as saying.
“And until the 6th tranche is released, it is highly unlikely that the IMF will hold any negotiations on a future arrangement,” the source added.
Pakistan, which has borrowed more than half of its 50-billion-dollar external loans from the IMF, the World Bank and the Asian Development Bank, had earlier indicated that it might seek another loan arrangement of about 3.2 billion dollars to meet its financial obligations and to repay earlier debts.
“But the country’s economic performance is so poor that it is difficult to imagine how they could have convinced the IMF to release the next tranche,” the source said, adding, “This was not a good trip for the Pakistani delegation.”
The IMF’s concerns revolve around Pakistan’s rising inflation, a widening fiscal deficit, exemptions incorporated in the reformed general sales tax (RGST) and energy subsidies.
Pakistan still has about two months to implement at least some of the reforms recommended by the IMF to qualify for the sixth instalment and seek a new package.
Islamabad is expected to send another delegation to Washington next month or in early June for more talks on continued international assistance to rescue its ailing economy. (ANI)
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Tags: asian development bank, bank spring, billion dollars, diplomatic source, dollar loan, economic performance, energy subsidies, financial obligations, fiscal deficit, imf, instalments, international assistance, international monetary fund, islamabad, loan arrangement, loan package, performance benchmarks, sixth instalment, spring meetings, tranche