Saturday, August 20, 2022

Pakistan seeks US support to revive IMF programme

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ISLAMABAD: Pakistan has sought support from the United States for the revival of the International Monetary Fund (IMF) programme as the global lender has not yet agreed to a staff-level pact despite the tough measures by the government, ARY News reported.

According to details, Finance Minister Miftah Ismail and Minister of State for Finance Ayesha Pasha met with US Ambassador Donald Blome and sought Washington’s support for the revival of the IMF programme.

Blome was apprised that the government has proposed fiscal consolidation equal to 2.2 percent of Gross Domestic Product (GDP) in difficult circumstances.

The US ambassador was informed that despite three rounds of talks and several virtual contacts, the IMF did not even share the draft of the Memorandum for Economic and Financial Policies (MEFP) with Pakistan.

The US is the largest shareholder in the IMF and has in the past too played a role in helping Islamabad complete the fund’s programme reviews. The Ministry of Finance did not officially comment on the article.

Officials have claimed that the memorandum forms the basis of any staff-level agreement and without finalization of the MEFP no formal staff-level agreement can be signed.

Pakistani officials further said that after the increase in petroleum prices and electricity tariffs, it was hoped that the global lender would be ready for staff-level negotiations.

“However, the IMF is now demanding to withdraw tax incentives and collection of 150 billion additional revenue from the salaried class,” the officials added. The government has already massively increased fuel prices and abolished all subsidies.

PML-N-led coalition government on Wednesday has jacked up petrol price by Rs24 per litre. The announcement was made by Finance Minister Miftah Ismail, citing government was not in a position to bear more subsidies anymore.

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