The Pakistan Economy Watch (PEW) on Thursday said restoring the confidence of investors without restoring the confidence of the IMF is an illusion.
Running the economy without improving relations with the international organization is like playing with fire, it said.
Accepting all IMF demands is the only option which if delayed will inflict more damage to the economy, said Dr. Murtaza Mughal, President of PEW.
He said that despite reassuring statements from key political leaders and senior officials, rumors of default in the country are gaining momentum, the rupee is depreciating against the dollar and foreign exchange reserves are dwindling alarmingly.
Dr. Murtaza Mughal said that international credit rating agencies are continuously lowering Pakistan’s rating, commercial lenders have refused to extend the repayment period of loans, and some international organizations have expressed fear of a serious currency crisis in Pakistan.
He added that the IMF has postponed its review twice, the program will be restored only after the completion of the review and Pakistan will be able to get 1.2 billion dollars.
Owing to the tension between the IMF and Pakistan some other institutions and friendly countries are also not willing to give loans to Pakistan resulting in worries among the business community. Man investors have delayed their investment decisions and they are awaiting some positive signals.
Dr. Mughal said that the policymakers should not deceive themselves and restore ties with the IMF to end anxiety, uncertainty, and rumors which are very harmful to the limping economy.
