Pakistan may turn to China for bailout as IMF deadlock persists


ISLAMABAD: According to sources, Pakistan is now looking at a “Plan B” to avert the full outbreak of the balance of payments crisis if the International Monetary Fund (IMF) continues to delay the relaunch of the already delayed $6.5 bailout program.
The financially strapped nation of over 220 million people will have no choice but to ask China to develop a mechanism to bail out the ailing economy, The News reported.
“Faced with the deepening political and economic crisis in the country, the IMF has adopted a wait-and-see policy, which cannot be continued for an extended period,” the sources said.
“Either the IMF program must be revived by the time the ninth review is completed, or the program will be scrapped. We will no longer share data with the IMF without completing the ninth review,” they added.
Several reports suggest that Pakistan has already told fund staff to complete the review, otherwise the budget framework for 2023-24 would not be announced, The News reported.
The sources recalled that an ambassador from the western capital, speaking to a minister, inquired when Pakistan’s economy is likely to collapse.
“This blunt question from the dignitary shocked the minister, who told the visiting diplomat that Pakistan would never default,” the sources said.
It should be noted that the diplomatic community has also started inquiring about “domestic affairs”.
In the face of all these developments, independent economists are now suggesting the government make a last-ditch effort to revive the IMF program or clearly turn to China to bail out the struggling economy, The News reported.
Former finance minister and renowned economist Hafiz A. Pasha said that unless the IMF moves forward, Pakistan has no choice but to ask China to develop a mechanism to help Islamabad avert a full-blown crisis.

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