Pakistan and IMF Likely to Reach Bailout Deal: William Blair

Pakistan and IMF Likely to Reach Bailout Deal

Pakistan and IMF is expected to reach a bailout, William Blair Investment Management told Bloomberg on Wednesday.

The firm that invests in the capital has made the comments following Pakistan’s vital discussions with the world’s largest lender were reopened in Doha last week. These talks when completed successfully will result in the introduction of one billion dollars to Pakistan’s rapidly depleting foreign reserves.

“There remains much uncertainty, but given the high stakes involved, we believe Pakistan and the IMF can reach a consensus and formalize a fiscal consolidation plan for Pakistan to receive the next tranche of the IMF Extended Fund Facility program disbursement,” said Singapore-based Johnny Chen, a money manager at William Blair Investment Management, who holds the country’s bonds.

Chen said that “volatility provides entry opportunities to invest in Pakistan bonds”.

Pakistan and IMF Likely to Reach Bailout Deal

He further stated, “Pakistan is better able to stay out of suffering the same fate as Sri Lanka as they are working with the IMF at an earlier time to address their current crises. Pakistan also has greater buffers compared to Sri Lanka, though fiscal consolidation remains crucial”.

Pakistan is seeking to release additional money from the $6 billion bailout agreement that was signed with the world lender in the year 2019. The main issue in the talks between Pakistan and IMF is the subsidies, particularly ones for petroleum products that directly affect the rate of inflation.

Negotiations B/W Pakistan and IMF

Talks between Pakistan and IMF have been held in Doha from May 18. A technical team that included the finance secretary and interim State Bank of Pakistan governor and other officials was in Doha last week for discussions. The Finance Minister Miftah Ismail also joined the entourage just two days ago.

Officials are seeking an extension of the program until 2023 as well as that the program will be finished following the talks have concluded.

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