IMF Bailout on the Cards for Pakistan

Pakistan’s next government, to be chosen in a July 25 election, faces growing fears of a balance of payments crisis with speculation it will have to seek its second IMF bailout in five years, analysts said, AFP reported. The central bank is running down its foreign reserves and devaluing the currency in a bid to bridge a yawning trade deficit, and the winners of the July 25 election will have ‘limited time’ to act, Fitch ratings agency said on July 2. Together, the economic challenges are ‘horrendous’, said Ashfaque Hasan Khan, an analyst and former financial adviser to the Pakistan government. “The most important challenge will be how to protect Pakistan’s balance of payments, how to build Pakistan’s foreign exchange reserves and how to fix its fiscal position,” he told AFP. Pakistan—a rapidly growing country of some 207 million people—has been battling to get its shaky economy back on track and end a years-long chronic energy crisis that has crippled the industry.