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Pakistan's economic managers expect IMF staff-level agreement this week

Pakistan's economic managers expect IMF staff-level agreement this week

Business

The finance secretary sees IMF staff level talks wrapping up this week

ISLAMABAD (Web Desk) - Top economic managers of the country updated the parliamentary committees regarding all conditions agreed upon with the International Monetary Fund (IMF).

A day after the passing of the Supplementary Finance Bill 2023 in the National Assembly, State Minister for Finance Aisha Ghaus Pasha and Secretary Finance Hamid Yaqoob Sheikh responded to questions asked by the members of these committees in meetings held separately who have raised their concerns on modalities agreed upon with the Fund that could trigger a further spike in inflation.

MNA Qaider Ahmed Sheikh and Senator Saleem Mandviwalla chaired the meetings of the finance committees separately.

The secretary finance informed the NA committee that the consultations with the IMF are in the final stages. “We expect to conclude the consultations soon even within the week”, he further said.

State Minister Aisha Ghaus also spoke about the IMF talks and informed the NA standing committee that the fund has identified a fiscal gap of Rs875 billion.

Pakistan is awaiting a staff-level agreement with the International Monetary Fund (IMF) this week which will also pave the way for much-awaited credit flows from other bilateral and multilateral lenders.

-- IMF staff level talks wrapping up this week --

Pakistan expects to conclude talks with the International Monetary Fund (IMF) over a staff level agreement as soon as this week, the country's finance secretary said, in a crucial step towards unlocking funds to battle an economic crisis.

An IMF mission spent more than a week in Islamabad earlier this month to discuss a policy framework to allow the release of more than $1 billion in funding from a stalled $6.5 billion bailout package, originally approved in 2019.

However, the mission left without a conclusion.

"The consultations with the IMF are in the final stages. We expect to conclude the consultations soon, even within the week," Hamed Yaqoob Sheikh, the top official in the finance ministry, told Reuters.

The IMF's local representative didn't respond to a Reuters request for a comment.

'No subsidies for wealthy': IMF 'very clear', wants Pakistan's poor protected

The staff level agreement would need approval from the IMF's board before the funds can be released.

The financing package has been held up since late last year over policy issues, with the IMF requesting a series of fiscal adjustments, including the removal of subsidies, jacking up fuel prices and raising more taxes to bridge a revenue shortfall.

Pakistan has taken steps, such as raising more than 170 billion Pakistani rupees ($647.62 million) through a supplementary finance bill passed by the parliament on Monday.

Other measures that still need to be taken to finalise the agreement include raising interest rates, which already stand at 17%, as well as obtaining commitments for more bilateral and multilateral funding, officials say.

The IMF funds are critical for the $350 billion South Asian economy, which is facing a severe balance of payments crisis.

The fiscal adjustments demanded by the deal, however, are likely to fuel record high inflation, which hit 27.5% year-on-year in January, analysts say.

 

 




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