May 25, 2022 (MLN): Pakistan is likely to reach an agreement with the International Monetary Fund (IMF) for a bailout, William Blair Investment Management told Bloomberg today.
“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, which owns the nation's bonds.
“Volatility provides entry opportunities to invest in Pakistan bonds,” he added.
He said that Pakistan is better able to avoid the fate of Sri Lanka as they are engaging with the IMF at an earlier stage to solve their current crisis.
The country has also more buffers relative to Sri Lanka, though fiscal consolidation remains essential, he further added.
“We are confident we’ll get to the finish line,” Murtaza Syed, acting governor of the State Bank of Pakistan, said in an interview with Bloomberg TV on Tuesday.
Currently, Pakistan’s economic team is negotiating with the IMF for the release of $3 billion bailout package. The talks are likely to conclude today.
One of the prior conditions from the IMF is to reverse all fuel subsidies which cost Pakistan almost $12 million per day. However, despite the assurances, the new coalition government has not yet rolled out fuel subsidies as they fear that the removal of subsidies would badly affect society.
