Govt committed to reviving the IMF programme, says Miftah

Finance Minister Miftah Ismail on Thursday said that the Pakistan Muslim League-Nawaz (PML-N) government is “committed to reviving the IMF programme and put Pakistan back on a sustainable growth path.”

Ismail had returned from Doha, Qatar, where talks were being held between Islamabad and the fund from May 18th to 25th. Finance Minister Ismail and IMF’s Mission Chief to Pakistan Nathan Porter led their respective delegations.

Upon his return, the minister claimed that the country’s finance delegation had “very useful and constructive discussions with the IMF team over the last week”.

Contrary to Miftrah’s claims, it was earlier reported that the talks had ended on a note of “disappointment”, as Pakistan and the IMF failed to reach a staff-level agreement for the revival of the $6 billion programme.

In a handout, the IMF had emphasised upon “urgency of concrete policy actions, including removing fuel and energy subsidies”.
Miftah in his three-part tweet today said: “We discussed significant slippages in FY 22, caused in part by the fuel subsidies given in February 2022.”

“We discussed targets for FY 23, where, in light of high inflation, declining forex reserves and a large current account deficit, we would need to have a tight monetary policy and consolidate our fiscal position.”
He added that the IMF team emphasised 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.
However, the Pakistani negotiating team’s hands were tied from Islamabad and London, which was also felt by the IMF team.

It was the second time that Pakistan and the IMF tried to reach a staff-level agreement on the 7th review of the $6 billion Extended Fund Facility but failed. The disagreement may give a serious jolt to the markets.

Earlier, the last PTI government too had failed to convince the IMF to complete the seventh review and release nearly $1 billion loan tranche.