Pakistan, IMF begin technical level talks on ninth review

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) Tuesday have begun talks on a ninth review of $7 billion Extended Fund Facility (EFF), ARY News reported

Finance Minister Ishaq Dar received the IMF mission chief Nathen Porter upon his arrival at the Finance Ministry. Secretary Finance Hamid Yakoob, State Minister Ayesha Ghous Bux, SAPMs Tariq Pasha and Tariq are among the Pakistani delegation holding talks with IMF.

The technical level talks would continue till Friday (Feb 3) while the second phase of policy negotiations will continue till Feb 9 to finalise a memorandum of economic and financial policies (MEFP).

The federal government had already implemented two major conditions of the lender including allowing adjustment of the rupee against the dollar and surge in petroleum prices ahead of the talks.

The move came after Prime Minister Shehbaz Sharif had said that the coalition government wants to complete the ninth review without any further delay.

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

Pakistan had 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.

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.