March,22(E.A Report) Pakistan Business Council (PBC), one of the country’s largest corporate advocacy platforms, has warned that time is running out for the country as it struggles to resume the International Monetary Fund (IMF) programme.
“As stakeholders contest short-term power, Pakistan’s long-term future is in jeopardy,” said the PBC in a statement on Wednesday. “Drip feed and hope will not suffice. Without IMF’s programme and debt reprofiling, help from friendly nations is not forthcoming.” “Pakistan is running out of time,” it added.
The statement comes as Pakistan reels from one of its worst economic crises in history. The South Asian country has been faced with a barrage of woes with a perceived default risk and downgrade by international ratings agencies reflecting the state of the economy that has also had to bear major political turmoil and frequent change in key leadership.
Pakistan remains in talks with the international lender for the resumption of the IMF’s Extended Fund Facility (EFF), which has been stalled since last year.
The bailout programme’s revival has been deemed crucial to stabilise the economy that has been hit by a severe dollar shortage in recent months with reserves held by the central bank treading at critically low levels.
Last month, PBC had underscored the need to secure IMF support as well as maintain a narrow exchange rate, stem losses, cut expenditure and reduce the use of imported fuel for energy to put the country on a sounder base in the medium to longer term for economic stability.
Its CEO Ehsan Malik also forwarded suggestions to Federal Finance Minster Ishaq Dar that he said could be implemented quickly to enhance tax revenue from the un-taxed and under taxed sectors of the economy and to economize public expenditure to manage fiscal account.
PBC’s latest warning comes after Bloomberg economists also warned that the country could be heading towards default if funding from the IMF is not secured.
“Pakistan is careening toward a potential default as soon as June unless it secures aid from the IMF,” wrote Bloomberg economists Ankur Shukla and Abhishek Gupta.
“Our base case is that the IMF will deliver the remaining $2.6 billion in aid under the current bailout program by June – helping Pakistan wiggle through the immediate crisis – as the country has fulfilled most of the IMF’s conditions.”
“If the aid does not arrive, though, we think China will help plug the gap to head off a default,” they added.