A high-level Pakistani delegation left for China on Thursday to finalise the quantum of a potential financial aid package for the cash-strapped country, even as a team of officials from the IMF is here for talks on a bailout plan.
The government of Prime Minister Imran Khan is facing grave economic challenges as it struggles to avoid a financial crisis and keep the economy afloat.
Last month, Saudi Arabia said it would provide Pakistan with a USD 6 billion rescue package, but officials have said it is not enough, and the country still plans to seek a bailout from the International Monetary Fund (IMF).
On Saturday, China said it will provide the “necessary support” to Pakistan to tide over the present financial crisis after talks between Prime Minister Khan and his Chinese counterpart Li Keqiang in Beijing.
China has not yet revealed how much it would dole out to its all-weather ally Pakistan to address its financial woes.
The Pakistani delegation that left for Beijing includes secretaries of finance, trade and planning, as well as the governor of the State Bank of Pakistan, Geo News reported.
The delegation will hold talks with Chinese officials to finalise a possible economic package, in a follow-up to Prime Minister Khan’s maiden visit to China, it said.
Discussions will also be held pertaining to Pakistan-made products’ access to the Chinese markets, the report quoted sources as saying.
Finance Minister Asad Umar earlier this week confirmed that talks were held with China for a relief package during Khan’s visit, and that the two sides agreed on continuing discussions.
Umar said that the talks were not limited to a financial package, but also encompassed long-term partnership and investment with China.
Chinese Foreign Ministry spokesperson Hua Chunying, during a press briefing on Wednesday, reaffirmed that China would provide financial assistance to Pakistan.
“China has been providing utmost assistance to Pakistan as its capacity allows. We will continue to offer assistance and support within our capacity to Pakistan for its economic and social development in light of its needs and upon agreement by both sides,” Hua said.
Finance Minister Umar said Wednesday that Pakistan has averted an immediate balance of payment crisis with the help of China and Saudi Arabia.
Meanwhile, a delegation of the IMF arrived in Islamabad on Wednesday for talks that would last for two weeks.
“In the first phase, IMF’s technical team will hold talks with Pakistani officials. Pakistan will inform the money watchdog about the country’s economic needs,” Geo News reported separately.
Finance Minister Umar and heads of the Finance Bureau of Revenue and State Bank of Pakistan will attend the meetings, it said.
Earlier, IMF spokesperson Gerry Rice said the fund’s executive board will be sent for talks on a staff-level agreement.
Pakistan had formally approached IMF in October for loans to tide over the financial crisis.
Last month, IMF chief Christine Lagarde had said that she met with Umar, SBP Governor Tariq Bajwa and members of their economic team during which Pakistan formally requested for financial assistance.
“During the meeting, they requested financial assistance from the IMF to help address Pakistan’s economic challenges,” Lagarde said in October.
Pakistan was facing a USD 12 billion financing gap for the current fiscal year.
Pakistan government is keen to minimise the amount borrowed from the IMF by getting loans from “friendly” countries like Saudi Arabia and China as officials here believe that the global lender could attach tough conditions.
The talks with Pakistan on what would be the 13th IMF bailout package since the 1980s are scheduled to finish on November 20. Islamabad last received an IMF bailout of USD 6.6 billion in 2013.