Pakistan stepping closer to IMF deal

June 22, 2022 (MLN): Pakistan is now one more step closer to the IMF deal as the major development surfaced on Tuesday night wherein Pakistan side and IMF reached an understanding on the federal budget for FY23.

Accordingly, the Pakistan side agreed to generate Rs436 billion more taxes and increase the petroleum levy gradually up to Rs50 per litre to avail of the extended fund facility (EFF).

 IMF Resident Representative in Pakistan, Esther Perez Ruiz said, "Discussions between the IMF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue, and important progress has been made over the FY23 budget.”

The aforesaid development was made during a virtual meeting between the IMF staff mission and the Pakistani officials, led by Federal Minister for Finance and Revenue Minister Miftah Ismail.

The IMF mission will finalize monetary targets with the State Bank over the next couple of days and, in the meantime, share the draft of a Memorandum of Economic and Financial Policy (MEFP).

The MEFP would also contain certain prior actions that would be necessary for implementation before the IMF board takes up Pakistan’s case for approval and the subsequent disbursement of about $1bn next month, as reported by Dawn News.

“We have now locked the budget in consultation with the IMF,” Finance Minister Ismail told journalists, adding that all budget-related issues had been settled with the Fund.

In addition, IMF is likely to issue a statement confirming substantial progress on the fiscal framework, the two sides agreed.

According to government officials, the Pakistani side had agreed to start charging on all POL products a petroleum development levy which will be gradually increased by Rs5 per month to reach a maximum of Rs50.

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