Pakistan, IMF inch closer to revival of loan programme

ISLAMABAD: The International Monetary Fund (IMF) and Pakistan moved closer to the revival of $7 billion Extended Fund Facility (EFF) as the lender responded to the Memorandum of Economic and Financial Policies (MEFP) draft, ARY News reported on Wednesday, citing sources.

According to details, the Fund has responded to the Memorandum of Economic and Financial Policies (MEFP) draft – sent by officials of Ministry of Finance and Revenue.

Sources told ARY News that IMF and finance ministry held virtual talks today, adding that the ninth review to the revival of $7 billion Extended Fund Facility (EFF) will be completed soon.

It is pertinent to mention here that virtual talks between the International Monetary Fund (IMF) and Pakistan for the completion of the ninth review of $7 billion loan programme began a day earlier.

The officials of the finance ministry would brief the IMF about the implementation of the conditions set by them for the revival of the loan program.

Finance Bill

Earlier in the day, Federal Minister for Finance and Revenue Senator Ishaq Dar introduced the Finance (Supplementary) Bill 2023 or the “mini-budget” in the National Assembly as the coalition government rushes to fulfil the conditions of the International Monetary Fund (IMF) to secure loan programme needed to avoid a default.

Addressing the lower house of parliament, the finance minister announced to increase General Sales Tax GST rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes.

‘Pakistan receives MEFP draft’

Earlier on Feb 10, Finance Minister Ishaq Dar said that Pakistan had received the Memorandum of Economic and Financial Policies (MEFP) draft from the International Monetary Fund (IMF).

In a press conference, Dar said: “Pakistan is expected to receive $1.2 billion from IMF after the completion of ninth review of $7bn Extended Fund Facility (EFF).” He further said that Rs170 billion in new taxes would be imposed through a mini-budget.

The minister went on to say that the government and global lender officials would hold a virtual meeting in this regard on Monday.

The finance minister said that Petroleum Development Levy (PDL) on diesel will be hiked to Rs50/litre under the IMF target. “Govt will raise PDL on diesel by Rs5 in March and April respectively to meet IMF target,” he added.