Pakistan will have to enter back-to-back IMF program: Miftah

Former finance minister Miftah Ismail said that Pakistan’s dwindling foreign exchange reserves may force the country to enter another International Monetary Fund (IMF) program once the present one expires in June.

“We won’t have much more than $10 billion in reserves if any when this [plan] concludes in June. That would be enough import coverage for around a month and a half, he told local media. As a result, the nation would need to apply for loans from the World Bank and the Asian Development Bank, which would necessitate joining another IMF program.

“I am very sure we will need to have back-to-back IMF programs because of the debt payments we currently have to perform – roughly $20bn for the foreseeable future.”

Ismail compared admission to the IMF to being admitted to the intensive care unit, calling it a lender of the last option (ICU).

“You need to start leading a healthy life if you want to prevent having to use the ICU. We can avoid going to the IMF if we begin to live within our means and once we begin to pursue sensible and wise economic policies.”

The former finance minister continued, “But if we continue living like we are, going from one boom-bust cycle to another, the IMF is the lender of last resort and we have to keep going to it.”