- About that bailout?
Finally, the government got to sit down with IMF officials and begin the long process of determining whether or not there will be a 13th program with the Fund. They will take a good week to study all aspects of the economy and, if needed, hammer out details of a possible agreement. No doubt if Pakistan does go the Fund way again, austerity measures will be stiff even by IMF standards. But that much should be expected, considering how the economy is arguably in the worst state in recent memory.
The Asian Development Bank (ADB), too, put another question mark over Pakistan’s economy practically on the eve of the mission’s visit. It expects growth to slow down to 4.8pc as inflation ticks up to 6.5pc. And no prizes for guessing just which sector it expresses most concern about. Everybody is now aware of the depth of Pakistan’s external account troubles, and the urgent need to plug the giant hole. It also notes that stagflation, after staying away practically the entire previous electoral cycle, is beginning to rear its head again. All-in-all that makes for worrying headwinds in PTI’s first year in power.
Yet the party must also shoulder some of the blame, even though it took over a completely broken down ship, at least economically, to steer to clearer waters. Finance Minister Asad Omar said, not too long ago, that he’d settle the matter of the bailout by end-September at the latest. Yet October is just round the corner and there’s still no guarantee of an agreement with the IMF. And there’s really no telling just where the billions of dollars we so badly need will come from in case there is no alignment of interests. Our requirement is far bigger than friendly countries and brotherly states can help with. In all likelihood the bailout will come from the Fund. Hopefully the conditions will not be too harsh.
