Pakistan’s agreement with IMF likely ‘in two days’

ISLAMABAD/KARACHI – The fate of revival of much needed IMF loan programme would be decided in next two days, as crucial policy level talks between Pakistan and IMF for the seventh review under the extended fund facility have begun in Doha, Qatar.

Federal Minister for Finance and Revenue Miftah Ismail has reached Doha for the talks, which would continue for next two days (till May 25).

On Monday, Finance Minister Miftah Ismail said the nation is paying price of wrong policies and agreements signed by previous government with international monetary organisations.

Taking to reporters in Karachi before leaving for Doha for talks with IMF on Monday, he said tough conditions of withdrawing subsidies and imposing tax on petroleum products is the result of agreements of previous government with IMF.

The finance minister said as per agreements of previous government, the diesel price is to be increased  by 150 rupees per liter and petrol  by 100 rupees per liter but the  present government does not want to carry it forward  as it will result in heavy financial burden on the masses.

He said Imran Khan had always created impediments in the path of development of the country. He said Imran Khan’s 2014 sit-in caused postponement of Chinese president’s visit to the Pakistan and today IMF team that was due in Islamabad for talks has declined to visit because of Imran Khan’s sit-ins.

The finance minister expressed the hope that in next two days he will succeed in having agreement with IMF in the best interest of the country and the people.

| Finance minister leaves for Doha to join talks | Says IMF deal to be in the best interest of country | Will try to convince Fund on continuing with subsidies on petrol, electricity

Earlier, both the sides held technical talks in last week. The government would make another try to convince IMF on the massive subsidy being given on petroleum products as well as electricity.

Before leaving for Qatar, the finance minister once again said that the government doesn’t plan to increase the prices of petroleum products. He also stated that he would try to convince the IMF that the government can’t raise oil prices immediately as the nation cannot afford it and should be given some time. He said that the government has granted the subsidy and it will continue.

Meanwhile, an official of the Ministry of Finance informed that the government would request the IMF to give relaxation on the increase in prices of electricity and oil products keeping in view the higher inflation rate and uncertainty on political front. “Fuel prices are already higher in the country so the government will ask the IMF to give exemptions on eliminating subsidy on power and oil prices. We will also seek some time for increasing prices, likely be end of current fiscal year (June),” he said. Talking about the alternate plan, he said that government would slash the development budget and increase the tax collection in budget, which would be announced on June 10.

However, it would be a challenging task for the government to convince the Fund on the massive subsidy on oil products and electricity. In March 2022, talks between Pakistan and IMF were inconclusive mainly due to the then government’s decision to give subsidy on electricity as well as petroleum products prices and tax amnesty scheme for the industrialists. The previous government of PTI had assured to increase the petroleum levy of petroleum by Rs4 per litre per month to take it to Rs30 per litre by June. However, later, former Prime Minister Imran Khan had announced to keep oil prices unchanged from March to June this year. The IMF had expressed serious concerns over the decision and refused to release the tranche of billion dollars for Pakistan.

Pakistan would receive around one billion dollars from the Fund if the talks remain successful. In last month, the IMF had agreed to increase the size of its $6 billion loan programme by $2 billion, and extend it for another year to prop up Pakistan’s balance of payments position and foreign exchange reserves.

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