IMF to take up Pakistan's subsidy package in next review

March 01, 2022 (MLN): The International Monetary Fund (IMF) will take up the subsidy package of Pakistan in its seventh review talks, Bloomberg reported today. 

The significance of the recently provided relief package will be reviewed by the Fund.In addition, the other measures to counter the instability despite the limited fiscal space and a steep rise in the global oil market will also be discussed.

On February 28, 2022, Prime Minister Imran Khan unveiled a major relief package, including an Rs10 per litre reduction in petroleum prices, Rs5 per unit cut in electricity tariff and some other measures to protect the masses from the impact of global inflationary trends.

“The government has decided not to increase the prices of petrol and diesel as well as electricity tariff till the next budget,” Imran Khan said in his televised address to the nation.

The prime minister also announced to enhance the cash assistance, provided to eight million families under the government’s Ehsaas Programme, from the current Rs12,000 to 14,000 to help the poor people.

The recently announced relief package is a mixed bag that will help jobless graduates to some extent. Tax incentive to IT sector is a positive move. However, it is too early to comment that how the industrial sector will respond, Asad Rizvi, the former Treasury Head of Chase Manhattan noted.

“But fuel and electricity relief will add burden on government kitty,” he added.

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