FinMin Ishaq Dar confirms receiving MEFP from IMF; terms conclusion ‘positive’

Pakistan Chinese bank
Image courtesy: AAMIR QURESHI/AFP via Getty Images)

Finance Minister Ishaq Dar on Friday confirmed that the Pakistani government had received the Memorandum of Economic and Financial Policies (MEFP) from the International Monetary Fund (IMF), as the staff-level talks concluded “positively”, according to the financial czar.

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Addressing a press conference in the federal capital on Friday, after the IMF mission left Pakistan without signing a staff-level agreement, Ishaq Dar said that the parleys with the global lender ended “positively” and the government will have to impose Rs170 billion in taxes through a mini-budget to revive the loan program.

The finance minister said that the 10-day-long discussions were extensive covering the power, and gas sectors and the fiscal and monetary side.

The finance minister announced that new taxes worth Rs170 billion will be imposed and energy sector reforms will be implemented to restore the loan facility. He also added that the government was focusing on “minimizing untargeted subsidies”.

The finance minister said that some of the reforms suggested by the IMF were in Pakistan’s favor.

Dar insisted that there was no confusion.

“We will completely go through the [MEFP] over the weekend and will hold a virtual meeting with [Fund officials]. It will obviously take a few days,” he said.

The MEFP is a key document that describes all the conditions, steps, and policy measures on the basis of which the two sides declare the staff-level agreement.

Once the draft MEFP has been shared, the two sides discuss the policy measures outlined in the document. Once these are finalized, a staff-level agreement is signed, which is then forwarded to the Fund’s Executive Board for approval.

Ishaq Dar vowed to keep making efforts to ensure Pakistan completed an IMF program for the second time.