Basically we owe IMF a lot of money

The country’s foreign exchange reserves will continue to face mounting pressure in next two to three years due to re-payments of installments to the International Monetary Fund (IMF). Pakistan is likely to knock the door of International Monetary Fund for another loan in current financial year 2012-13 in order to retire IMF’s Stand-by Arrangement (SBA) facility. According to an official the burden of subsidies and higher security-related expenditures have badly affected the country’s fiscal system and adjustment path. The government also failed to focus on growth-oriented policy for reducing unemployment in the country besides borrowing that needed to be reduced in order to further bring down the interest rate. An official said the economy of the country has been badly hit by huge government borrowing, power and gas crisis and uncertain political and law and order situation. The official said more foreign inflows were expected in the coming months from other donors especially after improvement in relations with the US. The US also disbursed $280 million for the energy. The amount received $1.18 billion in Coalition Support Fund (CSF) from the US gave some space to the country’s economic trouble shooter to repay installments to the IMF on monthly bases.