Saudi Arabia ‘Okays’ $2 Billion Financial Support for Pakistan

In a major boost to Pakistan’s effort to seal the staff-level agreement with the International Monetary Fund, Saudi Arabia on Wednesday gave Pakistan the green signal for financial support of $2 billion. Sources in the Finance Ministry told ProPakistani that Finance Minister Ishaq Dar will also approach the leadership of the United Arab Emirates (UAE) to secure further financing before his visit to the United States to attend the annual spring meetings of the IMF and the World Bank Group (WBG). According to sources, Pakistan may still face some hurdles after securing external financing as IMF has objected to Rs. 900 billion the government spends in terms of subsidies. The international lender also wants Pakistan to further hike the policy rate, from the current 21 percent. Sources further said that the IMF not only wants Pakistan to curtail its petroleum imports but also wants the government to meet the collection target of Rs. 850 billion in terms of the petroleum development levy. The country is also being pressured to ensure that the tax collection target for the current fiscal year is achieved. Earlier in the day, Minister of State for Finance and Revenue Aisha Ghaus Pasha told reporters that Saudi Arabia has indicated its willingness to provide financial support and discussions are currently underway with the UAE and Qatar. This minister said the IMF deal will be signed as soon as assurances of financing from friendly countries arrive.