ISLAMABAD: Pakistan and the IMF have worked out details of over $38 billion financing gap during three years programme period where major reliance will remain on multilateral creditors, rollover of loans from friendly countries and launching of international bonds, it is learnt.

“The IMF loan size of $6 billion is part of $38 billion financing Pakistan requires over next three years. The government also plans to launch Eurobond/Sukuk bond for generating $1 billion each year over next three years period,” top official sources told The News.

However, Pakistan and the IMF have assessed different projections of budget deficit as the Finance Ministry had estimated budget deficit of 7.1 percent of GDP for the current fiscal year, but the IMF projected the deficit at 7.3 percent for the fiscal year 2019-20. The sources pointed out that both sides estimated different numbers of size of the GDP after which two different numbers emerged.

When contacted, IMF’s Resident Chief Teresa Daban Sanchez and inquired about details of breakup of $38 billion, she replied that Pakistani authorities would be in betterposition to answer this question especially about the details and breakup.

“My understanding is that it includes gross funds coming from China, UAE, Saudi Arabia, World Bank and ADB funds and issuance of Eurobond in international markets among others estimated for the duration of the programme.

Pakistani official sources said that the multilateral creditors such as the World Bank and Asian Development Bank would be providing $13 billion both in shape of project financing and programme loans over next three years.

The friendly countries such as China, UAE, Saudi Arabia and Qatar will rollover financing of around $12 to $13 billion. The government is making efforts to convince IDB for providing $1.5 billion for provision of oil over next three years. The IMF will provide $6 billion over three-year period with $2 billion on per annum basis.

“The IMF has agreed to provide $1 billion first tranche as budgetary support and this amount will be released on July 9, 2019,” said the official. The government also plans launching of international bonds and estimated to generate over $3 billion over next three years period. The government will launch Eurobond during the current fiscal year in order to generate $1 billion.

The Finance Ministry’s spokesman and Adviser Dr Khaqan Najeeb said engagement with the IMF will pave the way for Pakistan’s access to international capital market and concessional funding from multilateral and bilateral development partners. “It will also boost investors’ confidence and improve inflows to the country,” he added. He further stated that investors’ confidence would help build FDI and attracting remittances which are essential for non-debt creating inflows.