A shopkeeper makes garlands with US dollars and rupee notes at a flower market in Peshawar. Photo: AFP/Abdul Majeed
A shopkeeper makes garlands with US dollars and rupee notes at a flower market in Peshawar. Photo: AFP/Abdul Majeed

Pakistani officials have started drafting plans to request the country’s largest-ever bailout from the International Monetary Fund, The Financial Times reported on Monday, confirming what had been widely speculated.

The country will need between US$10 billion and $12 billion, according to one government adviser, double the $5.3 billion lent to the country in 2013. It will mark the 13th IMF bailout for the country.

Should the loan be granted, it would limit prime minister-elect Imran Khan’s options for public spending, an increase in which was a key campaign promise. Khan’s proposals included health care for all, improved education, and an ambitious expansion of welfare spending.

According to the FT report, the IMF will likely demand austerity measures including cutting agricultural subsidies, selling failing public firms and deep spending cuts. The Fund projects Pakistan’s fiscal deficit to hit 7% this year, versus a target of 4.1%.

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