IMF to check Pakistan’s debt sustainability before loan: Official

There are concerns that given Pakistan's growing Chinese debt, the same could happen to the Gwadar port and other major CPEC-linked projects in Pakistan.

A recent meeting between the IMF and Pakistan ended in a stalemate. (Reuters)

The IMF will conduct a proper debt sustainability analysis of Pakistan before granting it any loan, a senior official has said, amid concerns that Islamabad is seeking a multibillion-dollar bailout package from the global financial body to pay back Chinese creditors.

Cash-strapped Pakistan is seeking USD 8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country’s economy.

A recent meeting between the IMF and Pakistan ended in a stalemate. “Clearly debt transparency is essential to conduct a proper analysis of the sustainability of a country’s debt. That’s what the IMF does when we are going into a programme with our member countries. So that will be the case in Pakistan,” IMF Director Communications Gerry Rice told reporters at a news conference here on Thursday.

China is making huge infrastructure investments as part of its Belt and Road Initiative (BRI). The BRI’s flagship project is the USD 60 billion China-Pakistan Economic Corridor (CPEC) that is planned to run from northwest China’s Xinjiang province to Gwadar port in Pakistan’s Balochistan province.