IMF begins talks with Pakistan over flood relief
Officials from the IMF and Pakistan held talks on Monday amid reports that the flood-battered country was asking the fund to ease terms of a nearly USD 11-billion-dollar loan.
Washington: Officials from the IMF and
Pakistan held talks on Monday amid reports that the flood-battered
country was asking the fund to ease terms of a nearly USD
"I can confirm the meeting," one official said but
declined to elaborate on the specifics of the discussions at
the Washington-based International Monetary Fund headquarters.
But Masood Ahmed, director of the IMF`s Middle East and
Central Asia department, said Pakistan`s budget and
macroeconomic prospects, being supported by an IMF financed
program, would have to be reviewed due to the deadly floods.
The nearly month-long floods have killed 1,500 people
and affected up to 20 million nationwide in the country`s
worst natural disaster, with the threat of disease
ever-present in the miserable camps sheltering penniless
There are fears that losses could snowball to 43
billion dollars. The IMF meeting with the Pakistan officials
would "evaluate the macroeconomic impact of the floods, assess
the measures they are taking to address this impact, and
discuss ways in which the IMF can assist Pakistan at
this difficult juncture," Ahmed said at the weekend.
Pakistan`s finance minister Abdul Hafeez Shaikh will
ask the IMF to restructure the current loan or consider new
financing, Pakistan officials said last week.
"Either the fund steps forward and allows plenty of
relaxations on the current programme or we make a fresh start
and discuss a new program with performance criteria that are
tailored to our new economic realities," one official told the
"The present programme is not looking sustainable."
Even before the floods there had been speculation
that Pakistan might seek a new loan agreement with the IMF.
But in light of the natural disaster, Islamabad now
fears it will not be able to meet key IMF-set targets on
inflation and budget deficit levels.