Prime Minister Shehbaz Sharif (centre) signs off on the 2023-24 budget after its approval by the cabinet. EPA
Prime Minister Shehbaz Sharif (centre) signs off on the 2023-24 budget after its approval by the cabinet. EPA
Prime Minister Shehbaz Sharif (centre) signs off on the 2023-24 budget after its approval by the cabinet. EPA
Prime Minister Shehbaz Sharif (centre) signs off on the 2023-24 budget after its approval by the cabinet. EPA

Pakistan budget could secure $6.7bn bailout as central bank raises interest rates


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Pakistan edged closer to renewing a $6.7 billion bailout from the IMF, just days before a funding facility from the international lender expires on Friday.

Parliament agreed to amend the budget, cutting expenditure and raising taxes, as part of a series of moves to close a yawning deficit. The IMF has yet to comment on the government’s latest measures, which could unlock another $2.7 billion in loans.

The South Asian country has been under acute financial stress since at least spring 2022, when soaring inflation and widespread flooding – estimated to have caused around $30 billion of damage – shook its economy.

Inflation has been persistent, reaching nearly 40 per cent, despite the central bank hiking interest rates to record levels, raising them by 100 basis points on Monday.

Foreign debt has risen sharply to $23 billion, and it will be a challenge for Islamabad to make repayments, including a $1.6 billion installment due in July.

The latest measures turn the tables in Pakistan’s favour after a long impasse, increasing the chances the embattled nation will be able to avoid a sovereign default for now.

A Pakistani man watches as Finance Minister Ishaq Dar presents the 2023-24 budget to parliament on June 9. EPA
A Pakistani man watches as Finance Minister Ishaq Dar presents the 2023-24 budget to parliament on June 9. EPA

Pakistan will “be able to secure the program now,” said Ammar Khan, chief risk officer at Karandaaz Pakistan, an Islamabad-based non-profit that works to increase financial inclusion by helping smaller companies access credit.

“Unless, of course, something else breaks.”

In addition to mounting foreign debt, Pakistan’s dollar stockpile has shrunk by almost 60 per cent in the past 12 months, to $3.5 billion as of mid-June.

“Without the IMF, it would be difficult for Pakistan to avoid a default given their very limited reserves and large external debt service ahead,” said Eng Tat Low, an emerging market sovereign analyst at Columbia Threadneedle Investments in Singapore.

While the weekend’s developments may help Pakistan reach a deal with the IMF, they may also come at a cost to Prime Minister Shehbaz Sharif and his government.

Higher taxes may hurt the administration’s already low approval ratings at a crucial time in the run-up to elections that must be held by October. This may further bolster the popularity of former PM Imran Khan, who has been calling for early polls as he challenges the military’s influence in politics.

Aid has been on hold since November as the IMF and government remained at loggerheads over issues such as the financing gap and taxes. The IMF has asked Pakistan to raise $6 billion in external financing, while Pakistan had lined up $4 billion as of early June.

Still, even if Pakistan succeeds in restarting the IMF loans, they will only provide a temporary respite given the country's large foreign debt and the limited size of the remaining loans. Finance Minister Ishaq Dar has said the new government formed after elections will need to reach an agreement on securing more IMF aid.

“If Pakistan is able to walk this tightrope then it may be able to avoid defaulting before elections, but afterwards a reprofiling of its external obligations will be required,” said Patrick Curran, a senior economist at Tellimer, who visited the nation last week. Pakistan will ultimately “have to rely on the goodwill of bilateral partners”, he added.

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5pm: Maiden (PA) Dh80,000 (Turf) 1,200m, Winner: ES Rubban, Antonio Fresu (jockey), Ibrahim Aseel (trainer)

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7.30pm: Maiden (TB) Dh80,000 (T) 1,600m, Winner: Law Of Peace, Tadhg O’Shea, Satish Seemar

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Directors: Anthony Russo, Joe Russo

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4/5 stars 

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Some of Darwish's last words

"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008

His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.

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Tips to stay safe during hot weather
  • Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
  • Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
  • Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
  • Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
  • Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
  • Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
  • Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
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Women’s World T20, Asia Qualifier

UAE results
Beat China by 16 runs
Lost to Thailand by 10 wickets
Beat Nepal by five runs
Beat Hong Kong by eight wickets
Beat Malaysia by 34 runs

Standings (P, W, l, NR, points)

1. Thailand 5 4 0 1 9
2. UAE 5 4 1 0 8
3. Nepal 5 2 1 2 6
4. Hong Kong 5 2 2 1 5
5. Malaysia 5 1 4 0 2
6. China 5 0 5 0 0

Final
Thailand v UAE, Monday, 7am

Europe’s rearming plan
  • Suspend strict budget rules to allow member countries to step up defence spending
  • Create new "instrument" providing €150 billion of loans to member countries for defence investment
  • Use the existing EU budget to direct more funds towards defence-related investment
  • Engage the bloc's European Investment Bank to drop limits on lending to defence firms
  • Create a savings and investments union to help companies access capital
THE CLOWN OF GAZA

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Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
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Three-day coronation

Royal purification

The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.

The crown

Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.

The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.

The audience

On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.

The procession

The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.

Meet the people

On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.

MISSION: IMPOSSIBLE – FINAL RECKONING

Director: Christopher McQuarrie

Starring: Tom Cruise, Hayley Atwell, Simon Pegg

Rating: 4/5

Updated: June 27, 2023, 5:26 AM`