Outcome in IMF bailout talks expected on Monday, Pakistan says

KARACHI: A final agreement on a financial assistance package from the International Monetary Fund will be announced on Monday, a top Pakistani government official said on Saturday, as talks continued to chalk out the final details of a bailout at a time of worsening economic outlook for the South Asian nation of 208 million people.
The long-delayed rescue package would be Pakistan’s 13th IMF bailout program since the late 1980s.
A visiting IMF team was expected to wind up negotiations by May 10 but the finance ministry announced on Friday night that talks would continue over the weekend.
“The talks will continue for two days (Saturday and Sunday),” Yousaf Baig Mirza, Special Assistant to the Prime Minister on Media, told Arab News. “The final outcome will be on the day after tomorrow (Monday).”
Prime Minister Imran Khan has called a meeting on Monday to review a draft of the deal, local media reported.
Khan, who assumed power in last August, inherited a wobbly economy but has faced growing criticism for failing to steady the ship. He has also been frustrated by low tax-collection rates.
Last month he carried out a sweeping cabinet reshuffle, including appointing experienced technocrat Abdul Hafeez Shaikh as his new de facto finance chief after removing Asad Umar. This month, Khan also changed the central bank governor and tax collection chief.
One of the key sticking points during the IMF bailout discussions so far has been how to manage the local rupee currency, whose exchange rate the central bank underpins in a de facto managed float system. But the country has been burning through its foreign currency reserves to defend the rupee.
Pakistan reportedly has agreed in latest talks to implement a flexible exchange rate, hike the policy rate, withdraw subsidies, reignite a privatization program, and curtail borrowing from the central bank.
The central bank in March cut its economic growth estimates, forecasting the economy would expand 3.5 to 4 percent for the year to the end of June, well short of a government target of 6.2 percent. The IMF paints a gloomier picture, predicting growth of 2.9 percent in 2019 and 2.8 percent next year.
Pakistan’s consumer price inflation in March rose to its highest since November 2013, hitting 9.41 percent year-on-year, before easing to 8.82 percent in April.