-Links release $3b loan to hike in PoL prices
-Negations with IMF conclude in Doha
From Our
Correspondent
DOHA: Negotiations between the government and the International Monetary Fund (IMF) have concluded, and the IMF has subjected the $3 billion economic relief program for Pakistan with the removal of fuel subsidies.
The Pakistani delegation failed to convince the IMF, as both sides could not reach a staff-level agreement despite week-long negotiations in Doha, Qatar, from May 18-25.
According to details, IMF has refused to issue loans to Pakistan until they remove all subsidies on fuel prices in the country. The issue of the $3 billion economic relief program to the Pakistani government has been linked to the removal of subsidies over fuel prices. Pakistan is looking for the release of $3 billion from the IMF. That amount would augment the nation’s foreign-exchange reserves, which at $10.2 billion covers less than two months of imports. The government is staring at a $45 billion trade deficit this year.
The revival was expected to bring stability to the financial markets, the fast-weakening Pakistani rupee, and the depleting foreign exchange reserves, as the government had pinned hopes on the programme’s resumption.
Following the conclusion of the talks, IMF Mission Chief for Pakistan, Nathan Porter, said the Fund held constructive discussions with the Pakistani officials, which aimed at reaching an agreement on policies and reforms.
According to a release, Both – Pakistan and IMF – aimed at reaching an agreement on policies and reforms that would lead to the conclusion of the pending seventh review of the authorities’ reform program, which is supported by an IMF Extended Fund Facility arrangement.
Considerable progress was made during the mission, including on the need to continue to address high inflation and the elevated fiscal and current account deficits, while ensuring adequate protection for the most vulnerable.
In this regard, the further increase in policy rates implemented on May 23 was a welcome step. On the fiscal side, there have been deviations from the policies agreed in the last review, partly reflecting the fuel and power subsidies announced by the authorities in February.
The team emphasized the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the FY2023 budget, to achieve program objectives.”
“The IMF team looks forward to continuing its dialogue and close engagement with Pakistan’s government on policies to ensure macroeconomic stability for the benefit all of Pakistan’s citizens.”
