Pakistan needs over $10 billion to pay back loans, meet expenses: IMF report

ISLAMABAD: The IMF has assessed Pakistan's gross external financing requirements at $10.8 billion for the new fiscal year, a new report said.

According to the latest International Monetary Fund report, released after completion of the third review of Pakistan's economy under the $6.7 billion bailout programme, most of the funds are needed to return the loans that the country has taken from foreign lenders over the years, The Express Tribune reported today.

The report, jointly prepared by the IMF staff and State Bank of Pakistan, says Pakistan will require $3.1 billion just to cover the current account deficit.

The government in the new fiscal year 2014-15 expects to receive $1.4 billion in Coalition Support Fund (CSF), which reflects the expenses the country makes on defence and logistics in the global war against terrorism and is later on paid by the US, it said.

Against the estimated CSF of $1.4 billion for the last fiscal year, the government received only $674 million in two tranches.

The report said hopes for a third tranche of $375 million in the last quarter of the year were dashed, which would increase the current account deficit by the same amount.

The delay in launching an operation in North Waziristan was a reason for stopping the release of the promised $375 million, it said.

The government needs $5.4 billion to retire medium and long-term debt including $1.3 billion to the IMF, besides another $3.6 billion to pay back loans acquired from the World Bank and Asian Development Bank (ADB).

An amount of $2.3 billion will also be needed to return short-term loans that the Pakistan government has received in the last one year.

Against this huge financing gap, the report puts available financing at $6.5 billion.

It expects the country to receive $4.3 billion on account of FDI and privatisation proceeds.