Voice News

IMF seeks political consensus to approve $6.5b bailout

ISLAMABAD: The International Monetary Fund (IMF) expressed concern on Tuesday that the opposition will obstruct the implementation of severe economic decisions, asking the administration to meet all “requirements” for the completion of the long-delayed programme review.

The IMF’s visiting mission chief, Nathan Porter, emphasized the issue of the opposition’s role in difficult decisions that Pakistan would have to make to avoid default. According to government officials, he conveyed these concerns during the first round of 10-day discussions.

The Pakistani delegation was led by Finance Minister Ishaq Dar.

According to sources, the IMF mission director expressed fear that the opposition might impede the implementation of extra taxation measures that the government planned to impose in order to restart the discussions.

The government has also begun work on a plan to raise electricity costs.

According to the sources, the finance minister informed the IMF mission head that the administration believed in political engagement. According to the sources, Dar suggested that the government would endeavor to impose higher taxes in a way that would avoid any unfavorable legal and political objections.

The administration intended to issue a presidential ordinance, but if the IMF’s concerns persisted, it might issue a parliamentary act. The additional tariffs would be implemented after at least 14 days in Parliament.

The IMF mission chief asked Pakistani authorities to go above and beyond to meet the program’s commitments.

“Nathan Porter expressed confidence that the government will meet the IMF’s conditions for the 9th review. Porter anticipated that Pakistan would “maintain its progress on reforms in different areas and efficiently conclude the IMF programme,” according to the statement.

The IMF programme was set to expire in June of this year. So far, around $3.5 billion of the $6.5 billion total deal has gone unpaid. Pakistan is yet to complete the 9th review, which was supposed to be completed within the first week of November 2022, according to the amended timeline.

The 9th review covered the period July-September 2022, although both agencies would also consider the outcomes of the 10th review, which covered the period October-December 2022. At this point, no party has mentioned clubbing the 9th and 10th reviews, which may potentially uncover another $800 million.

According to the sources, the IMF mission chief inquired about Pakistan’s plan to close the fiscal gap, which had formed since the agreement in June of last year. According to Nathan, the finance ministry, “the IMF and Pakistan would collaborate on fiscal reforms.”

The administration suffered a severe loss when the Sindh High Court overturned the super tax, costing the government at least Rs 240 billion against the annual target of Rs 7.470 trillion.

The finance minister, for his part, pledged his full support to the mission and “committed to working together to obtain an agreement to conclude the 9th review under the Extended Fund Facility (EFF),” according to the finance ministry.

IMF resident representative Esther Perez Ruiz, Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha, SAPM on Finance Tariq Bajwa, State Bank of Pakistan Governor Jamil Ahmed, and the Secretary of Finance were also present for the first round of talks.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *