Pakistan is unlikely to be able to meet its legal obligation to pay $1.4 billion (120 billion rupees) to the IMF in calendar year 2012 as repayment of the 7.2 billion dollars Stand By Arrangement (SBA) begins, sources told Business Recorder.
Rs 120 billion is 4 percent of the federal budget for 2011-12 and, according to sources, may compel the government to seek a new programme loan from the Fund to enable Pakistan to begin paying back the SBA. However, the new programme, if any, would be harsher than the stalled SBA, analysts maintain, with the Fund now seeking achievement of targets rather than accepting targets as a prerequisite to reactivating the SBA. The fact that the SBA remains stalled is indicative of the Fund''s lack of confidence in the government''s ability to meet its 2011-12 budget targets.
Sources said: "In the year 2012, the repayment schedule to the Fund by Pakistan would be $ 413 million, on February 24; $ 413 million on May 25; and $ 113 million on June 29". In the year 2013, the country has to repay 2.362 billion SDR, 1.230 billion SDR in 2014, and 193 million SDR in 2015.
Pakistan has received 7.27 billion dollars under the SBA. However, it has yet to receive the enhanced 3.2 billion dollars package that was premised on the likelihood of Pakistan returning the amount as soon as 2009 Tokyo pledges were disbursed. The Tokyo pledges, by and large, remain undisbursed to this day.
Sources said that the country has to repay its loan under SBA within the next four years (2012 to 2015). "In order to repay its loan, Pakistan may seek a new loan programme with the Fund--of $ 3.5-5 billion".
Details of the disbursement schedule under SBA are as follows: Nov 26, 2008 $ 3.1 billion; April 1, 2009 $ 847.1 million; August 7, 2009 $ 1200.2 million; $ 1.2 billion on December 23, 2009; and $ 1.13 billion on May 14, 2010. A nine-month extension of SBA by the Fund was granted from Dec 27, 2010 to September 30, 2010.
According to IMF Country Report dated December 2008, "In the context of the request for Stand-By Arrangement, Pakistan''s projected repayments to the Fund would rise from about 5 percent of public external debt service in 2008/09 to nearly 30 percent in 2011/12 and about 45 percent in 2012/13".
The federal budget for 2011-12 has already estimated unrealistic external financing to the tune of Rs 413.92 billion, that is considerably higher than the revised estimates for 2010-11 of 290 billion rupees - which reflects a shortfall from the 2010-11 budgetary estimate of 387 billion rupees.