(Bloomberg) -- Pakistan will seek a bailout from the International Monetary Fund as the government seeks to stabilize the economy and plug dwindling finances.
After consulting with “leading economists” Pakistan will formally approach the IMF for support and Finance Minister Asad Umar will hold talks with officials during the lender’s annual meetings in Bali this week, the Finance Ministry said in a statement late Monday. Umar told Bloomberg in August that the government may need more than $12 billion.
Prime Minister Imran Khan, who came to power after July elections, is under pressure to generate external funding as the country faces the latest in a long line of financial blowouts. It’s the thirteenth time Pakistan has turned to the IMF for support since the late 1980s and the lender said last week that recent government efforts haven’t been sufficient to stem a looming crisis.
“The challenge for the current government is to ensure that fundamental economic structural reforms are carried out to ensure that this spiral of being in an IMF program every few years is broken once and for all,” the Finance Ministry said. “To correct the underlying imbalances, fiscal and monetary actions needed to be undertaken without delay.”
Foreign-currency reserves have plunged 40 percent in 2018 to the lowest in almost four years, while the nation is running twin current-account and budget deficits of more than 5 percent of gross domestic product. Authorities have devalued the rupee four times since December.