Pakistan and the International Monetary Fund on Sunday agreed to extend the existing three-year extended fund facility (EFF) for another one year and increase the loan size by $2 billion to $8 billion to ease pressure on the country’s balance of payments, support foreign exchange reserves and bring economic stability, Khaleej Times has learnt.
The Pakistan’s delegation, led by Minister for Finance Miftah Ismail, discussed pathways to complete seventh review with the IMF and agreed with the fund’s recommendations to reduce $2 billion fuel subsidies, pledging to pursue structural reforms to boost a crisis-wracked economy.
The Pakistan delegation held several meetings with the IMF officials, including IMF deputy managing director Ms Antoinette Sayeh, director MCD Jihad Azour and Mission Chief Nathan Porter. The IMF expressed support to the Pakistan delegation.
“An IMF mission lead by Mission Chief Nathan Porter will visit Pakistan in May to discuss the issues around subsidies on petrol and electricity announced by the out going government,” according to a press statement issued by Ministry of Finance.
'Good discussion'
Miftah Ismail, who took office this month after a previous government lost a no-confidence vote, laid out his government’s priorities and efforts to bring fiscal discipline while insulating the vulnerable from oil price volatility in the international markets.
The minister said he had ‘good discussions’ with the IMF during the meetings held on the sidelines of Washington-based lender’s annual spring gathering.
“I’ve requested the fund and I think they have, largely, they’ve agreed to extend this programme for another one year,” Miftah Ismail said in a video statement following talks with the IMF in Washington..
“I’ve also requested that they enhance the funding available to Pakistan from $6 billion under this programme to perhaps a little bit more,” he said.
IMF confirmation
The IMF also confirmed that the Pakistani authorities had requested to extend the EFF arrangement through June 2023 after the talks in Washington agreed to drop the subsidies.
“We agreed that prompt action is needed to reverse the unfunded subsidies which have slowed discussions for the seventh review,” the IMF said in a statement after discussions with Miftah Ismail in Washington.
“Based on the constructive discussions with the authorities in Washington, the IMF expects to field a mission to Pakistan in May to resume discussions over policies for completing the seventh EFF review,” the IMF said.
Pak team meets WB officials
The delegation also met Axel von Trotsenburg, managing director; Hartwig Schafer, vice-president and other officials of the World Bank.
Progress of on-going program loans and projects as well as avenues for further assistance were discussed.
Finance minister thanked the bank officials for the financial and technical support provided by the bank throughout. The World bank's MD operations also assured full support for Pakistan.
— muzaffarrizvi@khaleejtimes.com
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