Pak to seek 2nd IMF loan to pay off first

The last two tranches of the loan,worth 3.3 billion dollars,were suspended after Pakistan failed to levy the reformed general sales tax (RGST).

Repayment must commence from early 2012 and has to be completed by 2016.

It is looking increasingly likely that the government will seek another IMF loan programme to pay off the last one,according to a senior government official speaking on the condition of anonymity.

The source,however,was quick to point out that the new IMF programme was the result of government insolvency.

“The size of the new programme is not so important but what is critical is the signal it would give to the rest of the world,” The Express Tribune quoted the official,as saying.

He said the options on the table include a revival of the suspended programme “bridged” with a new programme,or “completing” the suspended programme and “getting a new one.”

Another option would be to terminate the existing programme and apply for a new one,but the signal that it would send to international creditors makes the government wary of proceeding with it.

According to the source,the government’s final decision in this regard will depend on what conditions the IMF attaches to any new programme.

According to the latest data from the central bank,Pakistan’s total debt stands at 11 trillion rupees,which is equal to 69.1 per cent of the total size of its economy.