Dar briefs mission on economic policies; Nathen confident Pak will meet IMF requirements
The International Monetary Fund on Tuesday agreed to allow Pakistan to provide relief to the poor segment of society through the Benazir Income Support Programme, but in the same breath laid utmost emphasis on “strict adherence” to financial discipline.
IMF’s review mission is in Pakistan for technical and policy level discussions to revive the $7 billion Extended Fund Facility stalled for months.
During the first session, the IMF’s review mission, headed by Nathan Porter, identified the budget deficit and slippages, reiterating its strict stance on implementing the conditions laid forth by the lender.
The two sides, on the first day of the technical talks, reviewed the economic situation of Pakistan and the ninth review of the bailout programme pending since September.
The mission review did not raise an objection to Pakistan’s desire to provide subsidies to the low-income segment of the country which is reeling with rising inflation and aftershocks of the devastations caused by the cataclysmic floods that affected 33 million people.
The Fund’s mission also agreed with Islamabad’s request to continue providing relief under BISP.
Dar briefed the mission on fiscal and economic reforms and measures being taken by the government in different sectors including bridging the fiscal gap, exchange rate stability and in the energy sector for the betterment of the economy, the statement released by the Ministry of Finance read.
He also apprised the delegation that reforms were being introduced in the power sector and that a high-level committee had been formed for devising modalities to eliminate the menace of circular debt in the gas sector.
The Fund insisted Pakistan fulfil promises made by the coalition government in its federal budget for the fiscal year 2022-23, which include:
Budget deficit should be maintained at 4.9%, Primary deficit should clock in at 0.2% of the GDP, Rs1,100 billion subsidy exemption for export sector should be removed, FBR’s tax collection target of Rs7,470 billion should be met, Circular debt should be reduced substantially, Rs855 billion collection target from petroleum levy should be met, Performance of state-owned entities should be improved to reduce their losses and
Privatisation programme should be implemented.
The sources added that Pakistan promised the Fund that it would fulfil all the conditions; however, it requested the Washington-based lender to grant more time to implement the promises it had made, says a news channel.
The IMF mission chief expressed his confidence that the Pakistan government would meet the IMF requirements for the completion of the ninth review and hoped that Pakistan would continue towards its progress on the reforms in various sectors and complete the IMF programme within time effectively.
“The IMF and Pakistan will be working together on fiscal reforms,” he said.
