ISLAMABAD: Pakistan has told 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 program.
According to reports, Pakistani authorities will make every effort to persuade the IMF’s review mission to reduce the cost of the inflationary burden on 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 met with the IMF mission chief virtually.
The meeting was attended by Dr. Aisha Ghous Pasha, Minister of State for Finance and Revenue, Secretary of Finance, Governor of the State Bank of Pakistan, and Chairman of the Federal Board of Revenue.
Meanwhile, the first batch of Finance Division, SBP, and FBR senior management have 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 wrap up the talks, with the hope of reaching an agreement for the IMF’s continued support until the programme is completed successfully. According to the finance minister, the government remains committed to the program’s planned reforms and meeting the structural benchmarks.
IMF Mission Chief Nathan Porter discussed 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 action.
The finance minister stated that the government understood the current economic problems, but that a tough decision would have to be made in order to mitigate the effects of inflation on the middle-to-low-income groups.
He emphasized that some of the factors that have negatively impacted the economy are beyond the government’s control. Exogenous factors such as supply shocks, commodity supercycles, and the Russia-Ukraine conflict pushed commodity prices even higher. These factors are putting a strain on both the current account and the foreign exchange reserves.
The minister stated that the government would take steps to reduce the burden on the economy, while also protecting vulnerable segments of the population.
The minister went on to say that we should aim to address structural issues so that Pakistan can end its fiscal deficit and transition to sustainable growth.
The finance minister thanked the IMF mission chief for his assistance during this difficult period for the global economy. Both parties expressed a strong desire to complete the review successfully.
