IMF agrees to extend its program for Pakistan with an addendum (Ld)

The decision was taken after consultations between Pakistani Foreign Minister Miftah Ismail and IMF Deputy Managing Director Antoinette Sayeh in Washington.

However, the decision is pending the fulfillment of some tough and tough demands, which include the cancellation of oil subsidies announced by former Prime Minister Imran Khan. The demands also include raising energy tariffs to meet the demand for stimulus and expansion of the IMF lending program.

“The IMF had asked Pakistan to withdraw the fuel and electricity subsidies that former Prime Minister Imran Khan announced on February 28 in complete disregard of fiscal prudence and to secure the support lost due to the double-digit inflation in the country,” sources said.

Subject to final terms, the IMF has agreed to extend the program by nine months to one year from the original September 2022 deadline.

Imran Khan’s previous government had signed the IMF bailout package worth $6 billion for a period of at least 39 months in July 2019. But the government failed to deliver on its pledge and the program stalled most of the time and there was at least $3 billion left. not disbursed.

“Before taking Pakistan’s case to the IMF board for approval, Islamabad should agree on the fiscal strategy for the upcoming financial year 2022-23,” an official source said.

The failures of the previous government have posed a major challenge to the current government of Prime Minister Shehbaz Sharif, which will have to demonstrate that it will reverse some bad decisions made by the old regime against commitments it made to the board of directors of the IMF in January this year.

It is pertinent to mention here that the two-year extension of the IMF, coupled with an additional $2 billion, would bring some clarity in economic policies and remove some uncertainty from the country’s economic difficulties.

“To finalize the extended program, an IMF mission will visit Pakistan probably from May 10,” an official source said.

–IANS
hamza/arm

Earnest L. Veasey