SBP-held forex reserves to stand at $9bn by end of ongoing fiscal, projects: IMF

• IMF forecasts external debt may decline to $123.556 billion.
• IMF says oil import bill may swell up to $17.63 billion per annum.
• Says remittances to decline by $3.5 billion and end at $29.37 billion. 

ISLAMABAD: The International Monetary Fund (IMF) has forecast that foreign exchange reserves held by the State Bank of Pakistan (SBP) would be at $9 billion by the end of the ongoing fiscal year, reported The News on Sunday.

The IMF does not foresee any gaps on the external account front but has highlighted a worrisome projection regarding remittances from abroad. The lender’s projection shows that remittances would decline by $3.5 billion, from the envisaged target of $32.889 billion to $29.377 billion by June 30, 2024.

The lender has also forecast that the oil import bill may swell up to $17.63 billion from $15.3 billion on per annum for the current fiscal year.

The projection about the foreign exchange reserves indicates that after the expiry of the ongoing $3 billion Standby Arrangement (SBA), the new government will have to go for another medium-term programme before it presents the fiscal year budget for 2024-25.

The IMF also assessed that Pakistan’s Net International Reserves (NIR) would be at a negative $11 billion for June 2024. The NIR target for September $-14.5 billion and for December it was $-13.8 billion.

The publication reported that the remittances in percentage of GDP may decline from 9.4% to 8.4% during the ongoing fiscal year. The IMF projected that the remittances would be standing at just $31 billion equivalent to 8.4% of GDP in the next financial year 2024-25.

The current account deficit (CAD) has been cut down from $6.42 billion to $5.6 billion for the current fiscal year after the signing of the Staff Level Agreement (SLA) under the SBA programme.

The trade balance on goods was reduced from $33.857 billion to $27.781 billion for the current fiscal year. The export target was envisaged at $30.627 billion. The imports were reduced from $64.7 billion to $58.408 billion for the current fiscal year.

The foreign direct investment has been projected to go up from $847 million to $1.07 billion for the current fiscal year.

According to The News, amid the gloomy outlook, IMF has projected one good development on the external debt front. The lender estimates that the external debt may decrease from $130.8 billion to $123.556 billion at the end of the current fiscal year. The gross external financing needs are also projected to decrease from $28.361 billion to $24.98 billion.

IMF MD meets PM

Meanwhile, IMF’s Managing Director Kristalina Georgieva met Pakistan’s Caretaker Prime Minister Anwaar-ul-Haq Kakar on the sidelines of COP 28 meeting in Dubai and stated in her tweet: “Met with Pakistani Prime Minister Anwaar_Kakar at COP28. We discussed commendable progress made [by] the government to maintain economic stability and timely implementation of planned reforms.”