ISLAMABAD - The talks between Pakistan and International Monetary Fund (IMF) for revival of loan programme still continue as both the sides have yet to reach consensus.
“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,” said IMF Resident Representative in Pakistan, Esther Perez Ruiz, while talking to The Nation on Wednesday.
Meanwhile, officials in the Ministry of Finance informed that Pakistan has accepted IMF’s conditions on fiscal side. However, other issues including power tariff, monetary policy issues and others are still under discussion. They informed that both the sides would reach an agreement in next couple of days. Both the sides would finalize a 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.
Earlier, the government has accepted all demands of the IMF including increasing budget volume, tax collection target, enhancing taxes on petroleum products and salaries class. The government has assured the Fund to impose Rs10 per litre levy and General Sales Tax on the oil products from July this year. Later, the government would gradually enhance the petroleum levy Rs5 per litre every month taking it to Rs50 per litre. Pakistan has increased the proposed tax collection target to Rs7.450 trillion for the next fiscal year from earlier Rs7.004 trillion.
| Islamabad has accepted the Fund’s terms on fiscal side
while other issues including power tariff, monetary policy
issues still under discussion | Finance minister says fuel
subsidy and IMF programme can’t go together
Finance Minister Miftah Ismail tweeted on Tuesday that the fuel subsidy and the IMF programme could not go together. “I have always said that we cannot have the IMF programme and the fuel subsidy at the same time. The POL prices have been hiked due to rise in fuel prices in international market. Imran Khan destroyed our economy in order to save his government. The fuel price cap is an unfunded subsidy.”
Pakistan entered the 39-month, $6 billion IMF programme in 2019, but only half the funds have been disbursed to date as Islamabad has struggled to keep targets on track. Pakistan would receive around one billion dollars from the Fund if the talks remain successful. Pakistan few months back had requested the IMF to increase the size of its $6 billion loan programme by $2bn and extend it for another year to prop up Pakistan’s balance of payments position and foreign exchange reserves. Pakistan had asked the IMF to enhance its bailout package from the remaining $3 billion to $5 billion.
“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,” said IMF Resident Representative in Pakistan, Esther Perez Ruiz, while talking to The Nation on Wednesday.
Meanwhile, officials in the Ministry of Finance informed that Pakistan has accepted IMF’s conditions on fiscal side. However, other issues including power tariff, monetary policy issues and others are still under discussion. They informed that both the sides would reach an agreement in next couple of days. Both the sides would finalize a 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.
Earlier, the government has accepted all demands of the IMF including increasing budget volume, tax collection target, enhancing taxes on petroleum products and salaries class. The government has assured the Fund to impose Rs10 per litre levy and General Sales Tax on the oil products from July this year. Later, the government would gradually enhance the petroleum levy Rs5 per litre every month taking it to Rs50 per litre. Pakistan has increased the proposed tax collection target to Rs7.450 trillion for the next fiscal year from earlier Rs7.004 trillion.
| Islamabad has accepted the Fund’s terms on fiscal side
while other issues including power tariff, monetary policy
issues still under discussion | Finance minister says fuel
subsidy and IMF programme can’t go together
Finance Minister Miftah Ismail tweeted on Tuesday that the fuel subsidy and the IMF programme could not go together. “I have always said that we cannot have the IMF programme and the fuel subsidy at the same time. The POL prices have been hiked due to rise in fuel prices in international market. Imran Khan destroyed our economy in order to save his government. The fuel price cap is an unfunded subsidy.”
Pakistan entered the 39-month, $6 billion IMF programme in 2019, but only half the funds have been disbursed to date as Islamabad has struggled to keep targets on track. Pakistan would receive around one billion dollars from the Fund if the talks remain successful. Pakistan few months back had requested the IMF to increase the size of its $6 billion loan programme by $2bn and extend it for another year to prop up Pakistan’s balance of payments position and foreign exchange reserves. Pakistan had asked the IMF to enhance its bailout package from the remaining $3 billion to $5 billion.
