Govt committed to revive IMF programme, says Miftah Ismail

ISLAMABAD: Finance Minister Miftah Ismail on Thursday said that the International Monetary Fund (IMF) has emphasized rolling back fuel and power subsidies, hours after the country failed to reach a staff-level agreement for the release of a $1 billion tranche, ARY NEWS reported.

Taking to Twitter to share the developments during talks with IMF, the foreign minister after returning from Doha said that their delegation had very useful and constructive discussions with the IMF team over the last week.

I have just returned from Doha after talks with the IMF. Our delegation had very useful and constructive discussions with the IMF team over the last week.

We discussed significant slippages in FY 22, caused in part by the fuel subsidies given in February 2022. 1/3

— Miftah Ismail (@MiftahIsmail) May 26, 2022

“We discussed significant slippages in FY 22, caused in part by the fuel subsidies given in February 2022,” he said and added that they also discussed targets for the fiscal year 2023, where, in light of high inflation, declining forex reserves and a large current account deficit, they would need to have a tight monetary policy and consolidate our fiscal position.

He confirmed that the government is committed to reducing the budget deficit in FY2023.

Miftah Ismail shared that the IMF team emphasized the importance of rolling back fuel and power subsidies, which were given by the previous administration in contravention of its own agreement with the Fund.

The IMF team emphasised the importance of rolling back fuel & power subsidies, which were given by the previous administration in contravention of its own agreement with the Fund.

Govt is committed to reviving the IMF programme & put Pakistan back on a sustainable growth path./

— Miftah Ismail (@MiftahIsmail) May 26, 2022

“[The government] is committed to reviving the IMF programme and put Pakistan back on a sustainable growth path,” he said.

Meanwhile, the International Monetary Fund (IMF) mission chief in his statement has said the previous Pakistani government violated the mutual agreement by giving subsidies on fuel.

The seventh review talks with Pakistan’s IMF mission were held in Doha. Finance Minister Miftah Ismail led the Pakistani delegation. The talks reviewed the financial situation for the fiscal year 2022 and the measures proposed for the new fiscal year 2023.

The IMF called for the withdrawal of subsidies on fuel and electricity, and expressed concern over the situation in the fiscal and current account deficits. The IMF also pointed out reforms in the current account and fiscal deficit.

IMF Mission Chief Nathan Porter said that the subsidy was given by the previous government in violation of the agreement.