DOHA: Pakistan has started talks with the International Monetary Fund (IMF) in Doha to strike a staff-level agreement for the release of a $1 billion tranche under the Extended Fund Facility (EFF), the Ministry of Finance confirmed Wednesday.
The ministry confirmed on Twitter that talks with the IMF mission started today.
“Talks with the IMF Mission started today. Finance Minister Miftah Ismail, [Minister of State] Dr Aisha Ghous Pasha, Finance Secretary Hamed Yaqoob Shaikh, central banks’ acting governor Dr Murtaza Syed, Chairman [Federal Board of Revenue] Asim Ahmad and senior officers from the Finance Division joined virtually,” the ministry stated on its Twitter handle.
The talks with the Fund will continue till May 25. Islamabad will have to convince the IMF to release the $1 billion loan tranche immediately as Pakistan struggles to protect its economy from a major meltdown.
During the technical-level talks with IMF officials, the Pakistani delegation is being led by Finance Secretary Hamed Yaqoob, while the delegation includes representatives of the State Bank of Pakistan (SBP), the Federal Board of Revenue (FBR) and Ministry of Energy.
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Meanwhile, Federal Minister for Finance and Revenue Miftah Ismail will lead the policy-level talks after the completion of technical-level talks.
It was learnt that the IMF is all set to ask policymakers for further tightening of fiscal and monetary policies. It will recommend taking additional taxation measures in the upcoming budget.
The IMF has asked Islamabad to jack up the FBR’s tax collection target of Rs7,255 billion for the next budget of 2022-23 against the desired target of Rs6,100 billion for the current fiscal year.
The IMF is also recommending further jacking up the policy rate by 100 to 150 basis points in the coming monetary policy.
Islamabad has so far received $3 billion, with the programme due to end later this year. Officials are seeking an extension to the programme through to June 2023.
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IMF’s Resident Representative Esther Perez Ruiz told Geo News that for Pakistan to see economic stability it is important for the country to adhere to the policies discussed in Washington during winters.
Pakistani Prime Minister Shehbaz Sharif, who took power with a coalition that removed Imran Khan in a no-confidence vote last month, has vowed to jump start the moribund economy, but analysts say his fragile government has failed to take tough decisions.
“It’s an administration that has refused to take hard political steps to bring eventual economic relief — but that’s exactly the sacrifice it must make by going to the IMF,” said Michael Kugelman, deputy South Asia director at the Wilson Center in Washington.