IMF says Pakistan asks for help


AP

ISLAMABAD, Pakistan — The International Monetary Fund said Wednesday that Pakistan has asked for its help to avoid a looming financial crisis brought about by high fuel prices and dwindling foreign investment.

Pakistani officials had previously said turning to the IMF would be a last resort.

Aid from the agency often comes with conditions such as cutting public spending that can affect programs for the poor, making it a politically tough choice for the government.

“The Pakistani authorities have requested discussions with the IMF on an economic program supported by financial assistance from the fund to meet the balance of payments difficulties the country is experiencing,” the agency said in a statement.

It said the amount of money to be given had yet to be determined.

Pakistani economists say up to US$5 billion is needed to avoid defaulting on sovereign debt due for repayment next year.

Any default would further shatter local and international confidence in the country as it battles soaring violence by al-Qaida and Taliban militants close to the Afghan border.

High oil prices and dwindling investment from overseas have triggered a balance of payments crisis that is undermining the Pakistani rupee.

The country is also battered by high inflation and chronic power shortages.