ISLAMABAD: Pakistan has indicated to the IMF negotiating team that it is willing to take “tough measures” such as increases in POL products and electricity prices, but only in stages, in order to restart the stalled $6 billion fund programme.
According to reports, Pakistani authorities will make every effort to persuade the IMF’s review mission to reduce the cost of the inflation burden that will affect the population and may request a phased approach to subsidy reversal, particularly on petroleum goods.
According to an official statement issued by the Ministry of Finance on Wednesday, Federal Minister for Finance and Revenue Miftah Ismail held a virtual meeting with the IMF mission chief.
Dr. Aisha Ghous Pasha, Minister of State for Finance and Revenue, Secretary Finance, Governor of the State Bank of Pakistan, and Chairman of the Federal Board of Revenue all attended the meeting.
Meanwhile, the first batch of senior management from the Finance Division, SBP, and FBR has arrived in Doha for the 7th Review Mission.
The finance minister and minister of state will also join the team in Doha early next week to conclude the discussion, with the hope of reaching an agreement for the IMF’s continued support until the programme is completed successfully. The finance minister stated that the government remains committed to the program’s planned reforms and meeting the structural benchmarks.
IMF Mission Chief Nathan Porter shared the IMF’s assessment of the economy’s challenges with the Pakistani delegation. He made it clear that Pakistan’s economy required both immediate and long-term corrective measures.
The finance minister stated that the government understood the current economic woes but agreed that tough decisions would have to be made while mitigating the effects of inflation on the middle-to-low-income groups.
He emphasized that some of the factors affecting the economy are beyond the government’s control. Exogenous factors such as supply shocks, commodity supercycles, and the Russia-Ukraine conflict drove up commodity prices even further. These factors are putting pressure on both the current account and the foreign exchange reserves.
The minister stated that the government would take measures to reduce the burden on the economy while protecting vulnerable segments of the population was also a priority.
The minister went on to say that we should aim to address structural issues so that Pakistan can end its fiscal deficit and move toward sustainable growth.
The finance minister thanked the IMF mission chief for his assistance during a difficult period for the global economy. Both parties expressed a strong desire to see the review through to completion.
