IMF mission arrives in Islamabad for talks on ninth review

ISLAMABAD: An International Monetary Fund (IMF) mission has arrived in Islamabad to discuss the stalled ninth review of the $7 billion Extended Fund Facility (EFF), ARY News reported.

According to details, an International Monetary Fund (IMF) mission arrived in Islamabad and the talks on ninth review of bailout programme will start today (Tuesday).

Sources told ARY News that Pakistan and the Fund will hold technical talks for the first four days, wherein economic data from different departments will be reviewed.

Pakistan secured a $6 billion IMF bailout in 2019, which was topped up with another $1 billion last year, but the lender then stalled disbursements in November due to Pakistan’s failure to make more progress on fiscal consolidation and economic reforms.

However, it is pertinent to mention here that Prime Minister (PM) Shehbaz Sharif had said that the coalition government wants to complete the ninth review without any further delay and he had told IMF chief executive about Pakistan’s willingness.

He made the statement while launching the ‘Youth Business and Agricultural Loan Scheme’ today.

“I have told the IMF chief executive that Pakistan is willing to complete the pending review and incorporate the conditions raised by it,” he added.

Earlier, in a statement, IMF Resident Representative for Pakistan Esther Perez Ruiz said: “At the request of the authorities, an in-person Fund mission is scheduled to visit Islamabad [from] January 31 – February 9 to continue the discussions under the ninth EFF review.”

She said that the mission would focus on policies to restore domestic and external sustainability, including to strengthen the fiscal position with durable and high quality measures while supporting the vulnerable and those affected by the floods; restore the viability of the power sector and reverse the continued accumulation of circular debt; and re-establish the proper functioning of the foreign exchange market, allowing the exchange rate to clear the forex shortage.

IMF’s list of prerequisite actions

IMF has asked Pakistan to take all required actions that could pave the way for striking a staff-level agreement and releasing of $1 billion tranche under the Extended Fund Facility (EFF).

The sources say the IMF has sought a roadmap from Pakistan for the collection of Rs855 via petroleum levy till June 30, 2023. The Pakistani authorities have to jack up levy on diesel by Rs15/litre and drag it to Rs50/litre.

The IMF has also sought settlement of circular debt in the gas sector for the revival of the stalled loan programme, the sources said and added Pakistan has to jack up the gas price up to 74% to fix the debt.

Pakistan has been also directed to take steps for the increase of Rs300 billion in tax collection and increase the basic electricity tariff. It has also been learnt that IMF wants Pakistan to end the ‘artificial ban’ on the dollar exchange rate.