PM announces cut in fuel prices n In televise address to nation, Shehbaz reduces diesel price by Rs40.54 and petrol price by Rs18.50 per litre with immediate effect to give direct relief to masses n Says govt increased oil prices with a heavy heart as PTI had left behind troubled economy n Agriculture, IT and export-based industry govt’s priority areas n Appreciates FM Miftah, economic team for negotiating successful deal with IMF.
ISLAMABAD - Following the reduction of oil prices in the international market, Prime Minister Shehbaz Sharif Thursday night announced a substantial reduction in oil prices giving direct relief to masses.
According to the decision, the price of diesel has been slashed by 40.54 rupees while petrol price by 18.50 rupees per litre and the new prices are applicable with immediate effect.
The prime minister announced this while addressing the nation which was broadcast live on all State and private TV and Radio networks in Pakistan.
He said that the reduction in oil prices is aimed to pass on the benefits of decreasing crude rates in the international market.
In a development earlier in the day, development, Pakistan and International Monetary Fund (IMF) finally reached a staff-level agreement, which would not only release $1.2 billion for Islamabad but it would also pave way for getting loans from other multilateral and bilateral sources.
Shehbaz Sharif in his address again blamed the previous PTI government for the troubled economy and said our coalition government inherited it.
The Prime Minister said the previous government crushed the agreement it had signed with the IMF and laid landmines for us. He gave justification for the increase in the petroleum prices over the last two months and said it was due to the unprecedented increase in oil prices globally.
“We had to increase oil prices with a heavy heart that put a burden on the common man”, the PM said. He said we had to make tough decisions for country’s betterment.
Recognising and appreciating Finance Minister Miftah Ismail and his economic team’s efforts in concluding the agreement with the IMF, he expressed commitment to make the country economically independent.
For this purpose, he appealed to the nation to work hard. The Prime Minister said we should learn lessons from the bad experiences of the past that wasted millions of the country’s economy. About the efforts to bring stability to the economy, PM Shehbaz Sharif said agriculture, IT and export-based industry are our priority areas where we will put all our efforts to make the country economically stable. “However, today with God’s blessing, oil prices are declining in the global market and it is by His mercy that today we have got the chance to reduce the prices,” the PM remarked.
He indicated that the benefit of any further decline in global oil price will also be passed to the public.
On the other side, the staff-level agreement with IMF would not only release $1.2 billion for Islamabad but it would also pave way for getting loans from other multilateral and bilateral sources.
“The IMF team has reached a staff-level agreement (SLA) with the Pakistan authorities for the conclusion of the combined seventh and eight reviews of the EFF-supported program. The agreement is subject to approval by the IMF’s Executive Board,” said Nathan Porter, who led the IMF team in the talks with Pakistan, in a statement.
The Fund would release $1.2 billion (SDR 894 million) for Pakistan after getting approval from the Board, bringing total disbursements under the program to about $4.2 billion. Earlier, Finance Minister Miftah Ismail in last month had claimed that Pakistan would get $1.9 billion from the IMF under the seventh and eighth review.
Additionally, in order to support the program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board will consider an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$7 billion. However, Pakistan few months back had requested the IMF to increase the size of its $6 billion loan programme by $2 billion to $8 billion and extend it for another year to prop up Pakistan’s balance of payments position and foreign exchange reserves.
The revival of IMF programme would not only release around one billion dollars for Pakistan but it would also pave the way for getting loans from other multilateral and bilateral sources. Prime Minister Shehbaz Sharif has congratulated its team on reviving IMF programme.
“Congratulations to our Finance & Foreign Office teams led ably by Ministers Miftah Ismail & Bilawal Bhutto for their efforts in getting the IMF program revived. It was a great team work. The Agreement with the Fund has set the stage to bring country out of economic difficulties,” he said on twitter.
Finance Minister has also congratulated the whole nation on the successful agreement with the IMF and said we will do more hard work, improve tax collection and create ease for the poor people. He thanked and congratulated Prime Minister Shehbaz Sharif and coalition political parties for their support and efforts. The IMF has issued detailed statement on Pakistan’s economic situation. “Pakistan is at a challenging economic juncture. A difficult external environment combined with procyclical domestic policies fueled domestic demand to unsustainable levels. The resultant economic overheating led to large fiscal and external deficits in FY22, contributed to rising inflation, and eroded reserve buffers.
According to IMF, the budget aimed to reduce the government’s large borrowing needs by targeting an underlying primary surplus of 0.4 percent of GDP, underpinned by current spending restraint and broad revenue mobilization efforts focused particularly on higher income taxpayers. Development spending will be protected, and fiscal space will be created for expanding social support schemes. The provinces have agreed to support the federal government’s efforts to reach the fiscal targets, and Memoranda of Understanding have been signed by each provincial government to this effect. On the back of weak implementation of the previously agreed plan, the IMF has noted that the power sector circular debt (CD) flow is expected to grow significantly to about PRs 850 billion in FY22, overshooting program targets, threatening the power sector’s viability, and leading to frequent power outages. The authorities are committed to resuming reforms including, critically, the timely adjustment of power tariff including for the delayed annual rebasing and quarterly adjustments, to improve the situation in the power sector and limit load shedding.
The IMF has stated that headline inflation exceeded 20 percent in June, hurting particularly the most vulnerable. In this regard, the recent monetary policy increase was necessary and appropriate, and monetary policy will need to be geared towards ensuring that inflation is brought steadily down to the medium-term objective of 5–7 percent. Importantly, to enhance monetary policy transmission, the rates of the two major refinancing schemes EFS and LTFF (which have over recent months been raised by 700 bps and 500 bps respectively) will continue to be linked to the policy rate. Greater exchange rate flexibility will help cushion activity and rebuild reserves to more prudent levels.
During FY22, the unconditional cash transfer (UCT) Kafalat scheme reached nearly 8 million households, with a permanent increase in the stipend to PRs 14,000 per family, while a one-off cash transfer of PRs 2,000 (Sasta Fuel Sasta Diesel, SFSD) was granted to about 8.6 million families to alleviate the impact of rampant inflation. For FY23, the authorities have allocated PRs 364 billion to BISP (up from PRs 250 in FY22) to be able to bring 9 million families into the BISP safety net, and further extend the SFSD scheme to additional non-BISP, lower-middle class beneficiaries.
To improve governance and mitigate corruption, the authorities are establishing a robust electronic asset declaration system and plan to undertake a comprehensive review of the anticorruption institutions (including the National Accountability Bureau) to enhance their effectiveness in investigating and prosecuting corruption cases.
“Steadfast implementation of the outlined policies, underpinning the SLA for the combined seventh and eighth reviews, will help create the conditions for sustainable and more inclusive growth. The authorities should nonetheless stand ready to take any additional measures necessary to meet program objectives, given the elevated uncertainty in the global economy and financial markets.
ISLAMABAD - Following the reduction of oil prices in the international market, Prime Minister Shehbaz Sharif Thursday night announced a substantial reduction in oil prices giving direct relief to masses.
According to the decision, the price of diesel has been slashed by 40.54 rupees while petrol price by 18.50 rupees per litre and the new prices are applicable with immediate effect.
The prime minister announced this while addressing the nation which was broadcast live on all State and private TV and Radio networks in Pakistan.
He said that the reduction in oil prices is aimed to pass on the benefits of decreasing crude rates in the international market.
In a development earlier in the day, development, Pakistan and International Monetary Fund (IMF) finally reached a staff-level agreement, which would not only release $1.2 billion for Islamabad but it would also pave way for getting loans from other multilateral and bilateral sources.
Shehbaz Sharif in his address again blamed the previous PTI government for the troubled economy and said our coalition government inherited it.
The Prime Minister said the previous government crushed the agreement it had signed with the IMF and laid landmines for us. He gave justification for the increase in the petroleum prices over the last two months and said it was due to the unprecedented increase in oil prices globally.
“We had to increase oil prices with a heavy heart that put a burden on the common man”, the PM said. He said we had to make tough decisions for country’s betterment.
Recognising and appreciating Finance Minister Miftah Ismail and his economic team’s efforts in concluding the agreement with the IMF, he expressed commitment to make the country economically independent.
For this purpose, he appealed to the nation to work hard. The Prime Minister said we should learn lessons from the bad experiences of the past that wasted millions of the country’s economy. About the efforts to bring stability to the economy, PM Shehbaz Sharif said agriculture, IT and export-based industry are our priority areas where we will put all our efforts to make the country economically stable. “However, today with God’s blessing, oil prices are declining in the global market and it is by His mercy that today we have got the chance to reduce the prices,” the PM remarked.
He indicated that the benefit of any further decline in global oil price will also be passed to the public.
On the other side, the staff-level agreement with IMF would not only release $1.2 billion for Islamabad but it would also pave way for getting loans from other multilateral and bilateral sources.
“The IMF team has reached a staff-level agreement (SLA) with the Pakistan authorities for the conclusion of the combined seventh and eight reviews of the EFF-supported program. The agreement is subject to approval by the IMF’s Executive Board,” said Nathan Porter, who led the IMF team in the talks with Pakistan, in a statement.
The Fund would release $1.2 billion (SDR 894 million) for Pakistan after getting approval from the Board, bringing total disbursements under the program to about $4.2 billion. Earlier, Finance Minister Miftah Ismail in last month had claimed that Pakistan would get $1.9 billion from the IMF under the seventh and eighth review.
Additionally, in order to support the program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board will consider an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$7 billion. However, Pakistan few months back had requested the IMF to increase the size of its $6 billion loan programme by $2 billion to $8 billion and extend it for another year to prop up Pakistan’s balance of payments position and foreign exchange reserves.
The revival of IMF programme would not only release around one billion dollars for Pakistan but it would also pave the way for getting loans from other multilateral and bilateral sources. Prime Minister Shehbaz Sharif has congratulated its team on reviving IMF programme.
“Congratulations to our Finance & Foreign Office teams led ably by Ministers Miftah Ismail & Bilawal Bhutto for their efforts in getting the IMF program revived. It was a great team work. The Agreement with the Fund has set the stage to bring country out of economic difficulties,” he said on twitter.
Finance Minister has also congratulated the whole nation on the successful agreement with the IMF and said we will do more hard work, improve tax collection and create ease for the poor people. He thanked and congratulated Prime Minister Shehbaz Sharif and coalition political parties for their support and efforts. The IMF has issued detailed statement on Pakistan’s economic situation. “Pakistan is at a challenging economic juncture. A difficult external environment combined with procyclical domestic policies fueled domestic demand to unsustainable levels. The resultant economic overheating led to large fiscal and external deficits in FY22, contributed to rising inflation, and eroded reserve buffers.
According to IMF, the budget aimed to reduce the government’s large borrowing needs by targeting an underlying primary surplus of 0.4 percent of GDP, underpinned by current spending restraint and broad revenue mobilization efforts focused particularly on higher income taxpayers. Development spending will be protected, and fiscal space will be created for expanding social support schemes. The provinces have agreed to support the federal government’s efforts to reach the fiscal targets, and Memoranda of Understanding have been signed by each provincial government to this effect. On the back of weak implementation of the previously agreed plan, the IMF has noted that the power sector circular debt (CD) flow is expected to grow significantly to about PRs 850 billion in FY22, overshooting program targets, threatening the power sector’s viability, and leading to frequent power outages. The authorities are committed to resuming reforms including, critically, the timely adjustment of power tariff including for the delayed annual rebasing and quarterly adjustments, to improve the situation in the power sector and limit load shedding.
The IMF has stated that headline inflation exceeded 20 percent in June, hurting particularly the most vulnerable. In this regard, the recent monetary policy increase was necessary and appropriate, and monetary policy will need to be geared towards ensuring that inflation is brought steadily down to the medium-term objective of 5–7 percent. Importantly, to enhance monetary policy transmission, the rates of the two major refinancing schemes EFS and LTFF (which have over recent months been raised by 700 bps and 500 bps respectively) will continue to be linked to the policy rate. Greater exchange rate flexibility will help cushion activity and rebuild reserves to more prudent levels.
During FY22, the unconditional cash transfer (UCT) Kafalat scheme reached nearly 8 million households, with a permanent increase in the stipend to PRs 14,000 per family, while a one-off cash transfer of PRs 2,000 (Sasta Fuel Sasta Diesel, SFSD) was granted to about 8.6 million families to alleviate the impact of rampant inflation. For FY23, the authorities have allocated PRs 364 billion to BISP (up from PRs 250 in FY22) to be able to bring 9 million families into the BISP safety net, and further extend the SFSD scheme to additional non-BISP, lower-middle class beneficiaries.
To improve governance and mitigate corruption, the authorities are establishing a robust electronic asset declaration system and plan to undertake a comprehensive review of the anticorruption institutions (including the National Accountability Bureau) to enhance their effectiveness in investigating and prosecuting corruption cases.
“Steadfast implementation of the outlined policies, underpinning the SLA for the combined seventh and eighth reviews, will help create the conditions for sustainable and more inclusive growth. The authorities should nonetheless stand ready to take any additional measures necessary to meet program objectives, given the elevated uncertainty in the global economy and financial markets.
