IMF to conduct Pakistan’s debt sustainability before loan
WASHINGTON: The IMF will conduct a proper debt sustainability analysis of Pakistan before granting it any loan, a senior official has said, amid concerns that Islamabad is seeking a multibillion-dollar bailout package from the global financial body to pay back Chinese creditors.
Pakistan is seeking USD 8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country’s economy.
A recent meeting between the IMF and Pakistan ended in a stalemate.
“Clearly debt transparency is essential to conduct a proper analysis of the sustainability of a country’s debt. That’s what the IMF does when we are going into a programme with our member countries. So that will be the case in Pakistan,” IMF Director Communications Gerry Rice told reporters at a news conference here on Thursday.
China is making huge infrastructure investments as part of its Belt and Road Initiative (BRI). The BRI’s flagship project is the USD 60 billion China-Pakistan Economic Corridor (CPEC) that is planned to run from northwest China’s Xinjiang province to Gwadar port in Pakistan’s Balochistan province.
There are concerns that given Pakistan’s growing Chinese debt, the same could happen to the Gwadar port and other major CPEC-linked projects in Pakistan.
But China has rejected criticism that the CPEC projects have saddled Pakistan with expensive debt.
Following Pakistan’s request for financial support, IMF team visited Islamabad in November for talks.
“The discussions are active. They continue to work reaching an understanding on the policy priorities and reforms to stabilise the economy, lay the foundations for sustainable and inclusive growth,” he said.