Staff Report
ISLAMABAD: The ongoing talks between Pakistan and the International Monetary Fund (IMF) on Friday over the seventh review appear to have been delayed due to political uncertainty in the country. Sources said that the IMF staff team is closely watching the political developments in the country before taking a decision with regard to the conclusion of the seventh review even after around twenty days since the start of the discussion. Both the Finance Ministry and IMF officials are claiming that they remain engaged in discussions.
The Ministry of Finance on Friday in a statement stated that the IMF wanted some further discussions on the industrial promotion package over the next few days. The Ministry of Finance issued this clarification after a report claimed that Pakistan failed to convince the IMF over the amnesty scheme.
As per the documents, Pakistan had assured the IMF that it will not announce an amnesty scheme however Prime Minister on February 28, 2022, announced an industrial package that was basically an amnesty scheme.
The Finance Ministry further states that negotiations under the seventh review are continuing as planned and the two sides remain engaged on a regular basis at a technical level through virtual meetings and data sharing.
The focus of negotiations under the seventh review has been on the agreed targets between the two sides, as well as the recently announced relief and industrial promotion packages adding that there is a consensus that all the end-December agreed targets have been achieved, while progress on other actions mentioned in the Memorandum on Economic and Financial Policies (MEFP) for the sixth review has also been found to be satisfactory.
On the relief package, complete details, including financing options, have been shared with the IMF and a general understanding has been developed.
IMF has, however, indicated the need for some further discussions on the industrial promotion package over the next few days. An understanding is expected to be developed on the said package subsequent to those discussions.
Upon completion of the technical talks, the text of the Memorandum on Economic and Financial Policies (MEFP) for the seventh review will come under discussion. The Government is confident that the finalization of the MEFP would lead to the IMF board meeting towards the end of April. The government remains committed to completing the IMF program successfully in September.
On the other hand, the resident representative of IMF for Pakistan Esther Perez Ruiz on a query replied that “the authorities and the IMF remain engaged in discussions on recent developments and policies to promote macroeconomic stability in Pakistan”.
