By Muhammad Soban

ISLAMABAD, July 20: Pakistan is optimistic to get more loans from friendly countries after the revival of the extended fund programme of the International Monetary Fund (IMF), WealthPK reports.

According to Minister for Finance Miftah Ismail, Pakistan is likely to get $4 billion from friendly countries in the current month to bridge the gap in foreign reserves highlighted by IMF.

Pakistan has been facing an economic crisis as its current account deficit has reached $15.2 billion and its foreign currency reserves are depleting rapidly. The Pakistani rupee is depreciating against the dollar.

After lengthy negotiations between Pakistan and the IMF, the world financial institution earlier last week inked a staff-level agreement with the country that would lead to the release of the tranche of $1.18 billion. In addition to the $6 billion programme for the country agreed upon in 2019, the board of IMF is considering providing $1 billion to Pakistan.

According to the IMF, there is a gap of $4 billion in Pakistan’s foreign reserves. Pakistan is hoping to get loans from friendly countries to fill the gap. A widening current account deficit, as well as the rupee’s depreciation against the dollar, have resulted in a balance-of-payments crisis.

The Asian Development Bank and the World Bank will also lend $6 billion to Pakistan to help it resolve the economic crisis.

However, Dr. Arshad Mahmood Malik, a professor of economics at Arid University Islamabad, said that borrowing from IMF and other friendly countries was a temporary solution to fulfil the needs of the country.

Pakistan needs to take solid steps to bring structural changes and resolve its economic problems on permanent bases. It is the need of the hour to focus on increasing exports and reducing imports to strengthen the national economy.

“Oil is the major import of Pakistan. Pakistan can decrease oil import bills by moving to renewable energy resources,” Dr. Arshad told WealthPK.

Credits: INP-WealthPk