Debt reorganization request (Dar) to bilateral lenders (with or without the IMF).
IMF
Dar for bilateral lenders debt restructuring—with or without IMF The finance minister will not seek Paris Club or multilateral donors for debt restructuring or reprofile.On Saturday, Finance Minister Ishaq Dar announced that Pakistan would restructure its bilateral foreign debts without the IMF to get breathing room amid declining foreign exchange reserves.The minister said the petroleum development levy would not exceed Rs50 per litre.Dar told a post-budget news conference at the P-Block that as a sovereign state, it was not the right moment to restructure domestic loans. He advised learning to live within means. His counsel would have prevented the current issue.
print dollars
We cannot print dollars, thus bilateral debt restructuring is being considered. Dar stated that the Paris Club or multilateral donors like the IMF, World Bank, and Asian Development Bank will not be contacted for loan restructuring.Ishaq Dar, accompanied by Minister of State for Finance Dr. Aisha Ghous Pasha and other economic team members, declared there will be no haircuts, loan reprofiling, or repayment extensions. He did not mention bilateral donors. China has $27 billion in foreign loans, including $10 billion in bilateral debt, $4 billion in SAFE deposits, $4 billion in currency exchange arrangements, $6 billion in commercial loans, and others.
domestic debt
Dar said that Pakistan does not need domestic debt restructuring due to rising interest rates. He said the administration was considering allowing public investment in treasury bills to eliminate bank dependence. He said the 10th Review of the IMF programme was unlikely, but they hoped to finish the 9th Review by June 30, 2023, so Islamabad could get a $1.2 billion tranche from the Fund.He said the administration requested $2.4 billion from the IMF after the 9th and 10th Reviews and anticipated it in the budget 2023-24. However, the 10th Review may not be doable, thus commercial credit of $3.5 billion would fill the finance gap.
PTCL
Dar responded that the federal cabinet had no intention of extending its mandate, thus the government budgeted funds for a general election in the coming financial year. Coalition partners may disagree on using constitutional mechanisms to extend assemblies.He stated the delay in obtaining $800 million from Etisalat due to the PTCL privatisation was a lousy deal because 30 to 32 of 300 properties were required to be transferred in their names. They estimated $776 million, leaving $24 million. Pakistan wants $264 million. “Let’s admit we’re on a weaker wicket,” he said.In response to another question, he claimed Pakistan will get $2 billion in additional deposits from Saudi Arabia and $1 billion from the UAE, and they had assured the IMF. Pakistan would not default on Plan B. When fiscal capacity allows, the government will combine ad hoc relief for salaried workers into basic pay.
finance minister
The finance minister stated that raising remittance limits to $100,000 from Rs5 million was not an amnesty scheme because the maximum was Rs10 million before the prior government reduced it to Rs5 million. Every businessman complained that exchange rate devaluation limited the facility. He said this limit matched the significant exchange rate decline. He claimed that out of Rs1.074 trillion in subsidies, Rs9.7 billion went to the power industry and that more changes were needed to stop cash bleeding.When a journalist attacked the tax collection mechanism, Dar defended the budgetary numbers and supported the FBR.
FBR
He requested a contractor who could collect Rs12 trillion to close the FBR for a year.Reuters adds: According to an IMF national report from last year, Pakistan owed $37 billion to bilateral creditors in 2021, $23 billion of which was to China. Dar called the government’s budget prediction of 3.5pc GDP growth for the year ending June 2024 “realistic” and “on the lower side”. He was “hopeful” Pakistan would pass its ninth IMF evaluation, but “didn’t think” it would pass future reviews.
