Pakistan will need another IMF bailout programme after current one ends: Miftah Ismail

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Business Desk
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  • Miftah says Pakistan will have to seek another IMF programme after current one ends.
  • Recommends Pakistan hike gas tariffs irrespective of IMF terms. 
  • Says Pakistan can avert default risk with IMF assistance. 


Former finance minister Miftah Ismail believes that Pakistan will have to secure another bailout programme from the International Monetary Fund (IMF) after the current one ends.

Pakistan can avert the risk of default if the international lender concedes to resume its current programme, the former finance minister said, during Geo News show Aaj Shahzeb Khanzada Kay Saath.

The PML-N leader said the risk of default will not subside without IMF support. The rising dollar demand is due to its purchase to hedge against the fear of default, he explained.

Ismail said Pakistan got more aid than expected during the Geneva conference and this will allow Islamabad to negotiate more comfortably with the Fund. Furthermore, Saudi Arabia and China can be approached for new loans, he pointed out.

The former finance minister said the financing gap had increased, but it would automatically shrink. He said the gas tariff has not gone up since September 2020, therefore, it was time for industries like fertiliser and cement, as well as rich consumers, to pay higher tariffs.

It is indispensable to increase the gas tariff even if the IMF does not stipulate that as a condition, he said.

During the International Conference on Climate Resilient Pakistan in Geneva on Monday, Pakistan secured $10.7 billion in flood assistance pledges, well over a targeted $8 billion, after Prime Minister Shehbaz Sharif launched an $8 billion flood aid appeal, aimed at helping the country overcome the widespread devastation caused by the cataclysmic floods.

On the dollar shortage in the country, Miftah said that Pakistanis are investing in dollars rather than property. The demand for dollar will automatically scale down when the looming threat of default is over, he added.

"Most of the country’s woes will vanish, the day the country signs an agreement with the IMF," said the PML-N leader.

Every time, the default risk is deferred for four weeks with the inflow of $1 billion, said Miftah, adding that the remittances had fallen by 10%. 

In such a situation, there won’t be any problem if the dollar’s value is appreciated, he said. He remarked that the dollar’s value is artificially stabled at Rs227, while the fair value of dollar is Rs260. 

“If we reduce the default risk, the rest of the issues will be automatically resolved,” said the former finance minister.

“Gone are the days when we could have obtained new loans. Now, we have to return huge amount to the world,” said Miftah, adding the IMF does give concessions through negotiations. He said that the UAE had pledged $2 billion with IMF board, adding that it was difficult to talk to the the global lender without resolving the issue of exchange rate.

The businesses in the country won’t go for export unless the custom duty is shrunk, said Miftah. He hinted that the country would have to go for another IMF programme in June and added that it was better to take new loans than seeking deferment on loan payments from the friendly countries. 

The former finance minister said that Pakistan can talk to Saudi Arabia and China for new loans.