May 18, 2022 (MLN): The talks between Pakistan and the International Monetary Fund (IMF) have started today in Doha to resume the discussions over policies for the release of the remaining $1 billion tranche under the Extended Fund Facility (EFF), Ministry of Finance tweeted today.
Finance Minister Mr. Miftah Ismail, MoS Dr. Aisha Ghous Pasha, Finance Secretary Hamed Yaqoob Shaikh, Acting Governor SBP Dr. Murtaza Syed, Chairman FBR Mr. Asim Ahmad and senior officers from Finance Division joined virtually.
The talks are part of the ongoing 7th review of the Extended Fund Facility that Pakistan signed in July 2019, where the key issues such as increase in revenue collections and the removal of subsidies on petrol and electricity will be discussed.
The IMF has emphasized the need to reverse the unfunded subsidies which are the prior conditions for the ongoing $6 billion loan program. The government had assured the fund that it will increase the prices of petroleum products to fulfil this commitment. Despite the assurance, the incumbent government has not increased the prices of petroleum products yet, apparently due to political backlash.
“We had very productive meetings with the Finance Minister of Pakistan Miftah Ismail over Pakistan’s economic developments and policies under the Extended Fund Facility (EFF) program. We agreed that prompt action is needed to reverse the unfunded subsidies which have slowed discussions for the 7th review,” Mr. Nathan Porter, International Monetary Fund (IMF) Mission Chief for Pakistan said.
The authorities had also requested the IMF to extend the EFF arrangement through June 2023 as a signal of their commitment to address existing challenges and achieve the program objectives.
For the revival of the package, experts are of the view that the government has to take tough economic decisions pertaining to IMF requirements, otherwise, the country will have to bear irreparable losses.
Currently, rapid depletion in forex reserves, inflow delay, currency depreciation, rising inflation rates and quieter SBP are giving jitters to the economy.
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