IMF to review Pak economic situation

ISLAMABAD - The International Monetary Fund (IMF) officials would review the economic situation of the country in order to provide a Letter of Comfort to Pakistan in their upcoming visit, as Islamabad requires LoC from IMF to get committed budgetary support from the multilateral institution. The governments several steps including rightsizing of the federal cabinet and proposed cut in pay of civil bureaucracy are some of the efforts of Islamabad to get LoC from the IMF , a senior official told The Nation. It might be mentioned here that multilateral institutions including the World Bank, Islamic Development Bank and the Asian Development Bank have requested Pakistan to provide a LoC to be issued by the IMF, as a pre-condition for the release of any committed assistance for budgetary support. The multilateral institutions would provide budgetary support for the coming fiscal year 2011-12 if Pakistan gets LoC from IMF. The IMF officials, who are likely to visit Pakistan in the coming ten days, would discuss the economic situation of the country and also discuss the suspended Stand-By Agreement Programme with the government. Pakistan is currently on the IMF Stand-By Arrangement (SBA) that is stalled leading to the suspension of the last two remaining tranche releases (estimated at around $ 3.2 billion). Sources told The Nation that the government has already decided to cut the size of the federal cabinet besides considering other several options to reduce its expenditures. The government was left with no other option but to reduce the pays of the civil bureaucracy and to give two holidays a week in order to curtail its expenditures, as it could not reduce the defence budget and amount given in shape of interests or loans.

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