Prime Minister Shahbaz Sharif assured Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva that the government is fully committed to fulfilling its obligations towards the IMF.
The IMF was very annoyed that it was not taken on board on some items of the federal budget. However, a high official of IMF posted at Islamabad said that if the government would revise some budget proposals before its passage from the parliament, then the fund would be ready for further engagement with Pakistan.
The IMF also asked Islamabad to broaden the taxation but as usual the government could not take any decision regarding this. According to sources IMF has objections to the huge raise in the pay and allowances of the government servants and continuation of some subsidies that IMF asked the Finance Ministry for their withdrawal. But the government’s point of view was that it was the last budget for the PDM led government before elections so it was the political necessity of the government to present such a budget that may provide them face saving in the elections campaign.
If the IMF would not provide the tranche of 1.1 billion dollars , then the risks of going default for Pakistan may have been bigger but the financial experts say that after receiving the amount of one billion dollars from China , the country has saved itself from a defaulting situation.
Prime Minister Shahbaz Sharif is currently in France to attend the Global Financial Summit, where he discussed Pakistan’s programs and cooperation with the IMF with Georgieva.
According to a statement issued from the Prime Minister’s Office, Shahbaz Sharif briefed the IMF Managing Director about the government’s efforts for economic progress and stability. The Prime Minister expressed hope that funds from the IMF will be released soon, which will strengthen ongoing efforts for Pakistan’s economic stability and provide relief to the people.”
He mentioned that Pakistan has completed the previous measures for the Extended Fund Facility (EFF) under the expansionary fund facility.
The disbursement of the $1.1 billion installment of the $6.5 billion bailout package agreed between Pakistan and the IMF in 2019 has been delayed since November last year.
The IMF Managing Director informed Prime Minister Shahbaz Sharif about the ongoing process of evaluating the implementation of the installment under the bailout package from her institution’s perspective.
Last year in November, Pakistan had expected to receive the installment of a $1.1 billion loan, but the IMF insisted on additional conditions before disbursement.
Dr. Waqar Ahmed, who worked as former Finance Secretary and currently working as Joint Executive Director of the Institute for Sustainable Development in Islamabad, told the media that the Prime Minister Sharif has already presented Pakistan’s position before the IMF, and now the need is to expedite diplomatic efforts.”
He further stated, “The government needs to enhance diplomatic relations not only with the United States but also with other Western countries, which have a greater share in the IMF.”
Prior to presenting the budget, Prime Minister Shahbaz Sharif had stated that the federal government had taken certain measures in the budget proposals in line with the verbal assurance of the approval of funds from the international institution.