ISLAMABAD

Talks between Pakistan and International Monetary Fund (IMF) for the ninth economic review under extended fund facility has started on Monday in Dubai.
Secretary Finance Dr Waqar Masood is heading the Pakistan’s side in technical, while Finance Minister Ishaq Dar would lead in policy-making talks. Talks would continue from October 26 to November 4 in Dubai. Pakistan has so far completed eight reviews of the 36-month $6.64 billion extended fund facility (EFF) programme approved by the IMF in September 2013 with total disbursements of about $4.54 billion.
Pakistan and IMF would discuss the economic situation of the first quarter (July-September) of the ongoing financial year. “IMF will release ten tranche worth of $500 million to Pakistan in December if it shows satisfaction on the economic situation of the country,” said an official of the Ministry of Finance.
He further informed that Pakistan might face tough time from the Fund on several issues including delay in power sector reforms and privatisation programme. IMF Resident Representative in Islamabad Tokhir Mirzoev told the media last week that Fund would seek explanation from Pakistan on recently announced incentive package for agriculture and textile sectors.
A total of four more quarterly reviews and around $1.6 billion disbursements would complete the programme in August 2016 before the two sides consider a follow-up programme. Pakistan will start repayment of $6.64 billion Extended Fund Facility (EFF) to the International Monetary Fund (IMF) from March 2018. The EFF is a comparatively longer repayment period of up to 10 years, with repayments in 12 equal semi-annual installments. According to the EFF arrangement, a total of 12 mandatory reviews will be held concluding the programme by August 2016.
Apart from the ongoing review, there would be three other remaining reviews expected to end by August 2016, though the government may seek a delay in case implementation of the agreed conditions is delayed due to external or internal factors.
On September 4, 2013, the executive board approved the three-year extended arrangement under the EFF in the amount of about $6.64 billion at the time of approval of the arrangement, or 425 percent of Pakistan’s quota at the IMF). The programme was aimed at macroeconomic stabilisation that is, bringing the budget deficit down and reversing the balance of payments problems.