ISLAMABAD: On Tuesday, Prime Minister Muhammad Shehbaz Sharif spoke by phone with Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), to discuss issues pertaining to the IMF’s program with Pakistan.
The prime minister expressed optimism during the conversation that the IMF would decide to resume the program in a few days as a result of the Pakistan and IMF’s agreement on a number of issues. The IMF managing director recognized the efforts of the finance minister and his team for completing the program during her recent meeting with the prime minister in Paris.
Kristalina Georgieva praised PM Shehbaz’s leadership role in his efforts with respect to the IMF programme.
She said the IMF wanted an improved economic situation of Pakistan.
Earlier, the IMF had raised several issues with Pakistan’s budget for fiscal year 2024, saying that some of the proposed measures went against the EFF programme’s conditionality.
Esther Perez Ruiz, IMF representative for Pakistan, had earlier said Pakistan needed to satisfy the IMF on three counts, including the budget for the upcoming fiscal year, before its board will review whether to release the pending tranche.
With the programme’s expiry just days away and the IMF seemingly unconvinced with the budget, fears that the deal will not materialise have soared.
For its part, the government responded to the IMF’s concerns, saying that it was “flexible” on the budget and remained engaged with the international lender to reach an “amicable solution”.
Subsequently, the government last week made several changes to the next fiscal year’s budget, including fiscal tightening measures dictated by IMF in a last-ditch effort to secure critical funding.
“Pakistan and IMF had detailed negotiations for the last three days as a last effort to complete the pending review,” Finance Minister Ishaq Dar had said during a National Assembly session on Saturday in which he unveiled the changes.
The changes include Rs215bn additional tax measures, a Rs85bn spending cut, withdrawal of an amnesty on foreign exchange inflows, lifting of import restrictions, a Rs16bn hike in Benazir Income Support Programme allocations, and the powers to increase the petroleum levy from Rs50 to Rs60 per litre.
The revised budget was then passed by the Parliament and later also signed by Acting President Sadiq Sanjrani.
On Monday, an official told that “almost all the irritants between the IMF staff and the Ministry of Finance were addressed hours before the finance minister’s wind-up speech on Saturday”.
The official also said that it was now up to the IMF’s mission to line up the precise dates for the lender’s executive board approval and disbursement of funds. However, he acknowledged that it was not on the calendar until June 30, when the $6.5 billion Extended Fund Facility agreed in 2019 is set to expire.
Agencies
