Pakistan expecting $4.5bn from creditors: Shamshad

ISLAMABAD: Caretaker Minister for Finance, Revenues, and Economic Affairs Dr Shamshad Akhtar said on Wednesday that Pakistan was anticipating $4.5 billion from multilateral and bilateral creditors during the current fiscal year.

Over and above $4.5 billion from other multilateral and bilateral avenues, the IMF’s tranche of $700 million would also be disbursed once getting approval from the Fund’s Executive Board.

In an interview with the official flagship Journal of ICMA International, the minister said for the second quarter (Q2), the government expects to receive over $1.6 billion from these sources. The major creditors include the Asian Development Bank (ADB, World Bank (WB) and Asian Infrastructure Investment Bank, adding the inflows comprise both project-based and program-based funds.

She said negotiations for some program loans have been completed, and disbursements are expected. The country is currently meeting its debt obligations in a timely manner.Talking about the IMF program, the minister said, as the first review of the Standby Agreement was successfully concluded, a Staff Level Agreement (SLA) has been reached. This is subject to approval by IMF’s Executive Board and upon approval, Pakistan will have access to SDR 525 million (around $700 million).

On the existing economic situation, the minister said, despite domestic and global challenges during FY2023, fiscal and external sector stability has been achieved through various stabilization measures and structural reforms.

Fiscal deficit stood at 7.7% of GDP during FY2023 as compared to 7.9% last year while current account deficit FY2023 narrowed down by 87.2% to $2.2 billion against a deficit of $17.5 billion in FY2022. She said trade deficit was contained by 38.7% in FY2023 as compared to expansion of 36.4% in FY2022.

She said the caretaker government took charge in a very tough economic environment, adding turning around the economy was a challenging task and required careful economic planning, policy consistency and a favourable external economic environment. “The government is quite vigilant of the challenges/risks emanating from the domestic and external sides and taking timely measures to address them,” she added.

The minister said the government has taken some short-term actions to overcome speculations, smuggling, cartelization, and theft of publicly provided resources. The timely actions carried out by relevant government regulatory agencies have begun yielding positive outcomes, she added.

Hard earned gains on the fiscal and external accounts have started to translate into a pick-up in economic activity during first four months of FY2024, she added.