On Thursday, the Pakistan Economy Watch (PEW) said restoring investors’ confidence without restoring the IMF’s confidence is an illusion. It noted that running the economy without improving relations with the international organisation is like playing with fire. 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, rumours 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 organisations have expressed fear of a serious currency crisis in Pakistan.

He added that the IMF had postponed its review twice, the program would be restored only after the completion of the evaluation, and Pakistan could get 1.2 billion dollars.

Owing to the tension between the IMF and Pakistan, some other institutions and friendly countries are also unwilling to give loans to Pakistan, resulting in worries among the business community. Man investors have delayed their investment decisions and are awaiting some positive signals.

Dr Mughal said policymakers should not deceive themselves and restore ties with the IMF to end anxiety, uncertainty, and rumours that harm the limping economy.