——- Staff-level agreement likely to be finalized within two weeks
Staff Report
ISLAMABAD: In ongoing virtual negotiations between Pakistan and the International Monetary Fund (IMF) regarding a new program with the possibility of finalising a staff-level agreement within the next two weeks, as reported.
According to sources within the Ministry of Finance, substantial consensus has been reached in the virtual sessions with the IMF on all objectives and conditions related to the new program.
It was revealed that detailed discussions have taken place over the volume, duration, and other intricacies of the agreement during the three-day virtual negotiations. Following this, the IMF has given the green signal for a new loan program.
Sources added that Pakistan was required to meet several targets and conditions set by the IMF before July 10, all of which have been successfully met. Prime Minister Shehbaz Sharif has taken firm decisions to fulfill IMF conditions.
They further stated that federal government measures include adjustments in the budget as well as increases in electricity and gas prices.
Earlier, Federal Finance Minister Muhammad Aurangzeb warned that Pakistan will stay in the IMF cycle if taxes are not increased.
In an interview with Financial Times, he said that the “upcoming IMF program will not be our last fund programme if we don’t bring our tax revenues up,”
Aurangzeb maintained that he is hoping Pakistan will reach a staff-level agreement with the IMF this month, estimating the agreement to be worth $6-8 billion.
He acknowledged that the government’s reliance on imports has led to a cycle of debt and borrowing, stressing the need to enhance the country’s ability to repay loans. The minister also mentioned the lack of trust in the Federal Board of Revenue (FBR) due to corruption and harassment, stating that people are hesitant to pay taxes due to these issues.
Aurangzeb emphasized that the government must demonstrate positive performance in the next 2-3 months to address the country’s financial challenges.
Earlier, the International Monetary Fund appreciated Pakistan’s tough economic decisions and efforts regarding hike in gas prices.
It is pertinent to mention here that the fund’s delegation, led by Mission Chief Nathan Porter, visited Pakistan and held extensive negotiations from May 13 to May 23 to discuss the country’s economic improvements.
The International Monetary Fund mission assured of its commitment to working together for sustain-able economic growth. The statement noted that Pakistan’s economy would stabilize with the support of the Extended Fund Facility (EFF) program.
