Federal Minister for Finance and Revenue Senator Ishaq Dar said that after positive conclusion of staff-level talks on the Extended Fund Facility (EFF), Pakistan and the International Monetary Fund (IMF) would start virtual discussion on the Memorandum of Economic and Financial Policies (MEFP). “Good news is [that] as per their commitment, the team has gone according to their plan. As per their commitment, we have received MEFP. The draft is with us. We will study it and from Monday we will engage in virtual discussion with the fund,” he told a press conference on the completion of IMF staff-level visit to Pakistan.

The minister said that once completed and approved by the IMF Executive Board, Pakistan would receive the next tranche of $894 million. He said that the 10-day dialogue with IMF concluded positively and there was no ambiguity on anything. “The final round was held on Thursday during which we agreed and finalised all the things,” he added. He said there was mutual understanding to complete the programme, for the second time in the country’s history. He added that the government was committed to fulfilling its sovereign commitments.

The minister said that the IMF team also had a courtesy zoom meeting with the prime minister, who told them that the things agreed by the finance team would be implemented. He said that the policy package with IMF included Rs170 billion fiscal measures. He said that it was agreed to generate additional Rs170 billion new taxes. However, he said that the government would not impose any such taxes that would directly impact common people. He said that for imposing new taxes, a new finance bill might be presented in the parliament.

The minister said that it was agreed to increase the financial volume of the Benazir Income Support Programme (BISP) by Rs40 billion and take it from the existing Rs360 billion to Rs400 billion to provide relief to poor. He said that the government would reform the energy sector to reduce the losses. He said that the cost of electricity generation was Rs3,000 billion whereas recovery was just Rs18,000 billion, which resulted in huge losses. He added that the government prioritised the implementation of energy reforms and abolish untargeted subsidies.

The minister said that the government would pay all debts in the gas sector to rationalise the sector. He said that the government also pursued the agenda for privatisation to stop wastage of resources. He hoped that the government would receive payment from friendly countries as per their commitments on the international forum. Earlier, the IMF said in a statement that considerable progress was made on policy measures to address domestic and external imbalances. It said that virtual discussions would continue in the coming days to finalise the implementation details of these policies.

The IMF mission, led by Nathan Porter, visited Islamabad during January 31 to February 9 to hold discussions under the ninth review of the authorities’ programme supported by EFF arrangement. “The IMF team welcomes the prime minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions,” Porter said in a statement.

He said that key priorities included strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector. “The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development,” said the statement, received by WealthPK.

Credit: Independent News Pakistan-WealthPk