Pakistan has indicated to the IMF negotiation team that it is prepared to adopt “difficult steps,” such as raising POL and energy prices, but only in stages, in order to restart the stalled $6 billion fund programme.
According to sources, Pakistani authorities will also make every effort to persuade the IMF’s review mission that it should lower the cost of the inflationary load that would fall on the population, and may urge a gradual approach to the removal of subsidies, particularly on petroleum items.
“Secretary Finance Hameed Yaqoob and Chairman FBR Asim Ahmed went for Doha on Wednesday night for IMF talks, while the finance minister was due to join the review discussions on Monday,” government sources told The News on Wednesday.
According to an official statement released by the Ministry of Finance on Wednesday, Federal Minister of Finance and Revenue Miftah Ismail met virtually with the IMF mission leader.
Dr. Aisha Ghous Pasha, Minister of State for Finance and Revenue, Secretary Finance, Governor of the State Bank of Pakistan, and Chairman of the Federal Board of Revenue all attended the meeting. Meanwhile, the first batch of top executives from the Finance Division, the State Bank of Pakistan, and the Federal Board of Revenue has arrived in Doha for the 7th Review Mission.
The finance minister and minister of state will also join the delegation in Doha early next week to finalise the discussions, with the goal of reaching an agreement for the IMF’s sustained support until the programme is successfully completed. The finance minister underlined the government’s commitment to implementing the program’s changes and meeting the structural goals.
IMF Mission Chief Nathan Porter discussed the IMF’s assessment of the economy’s difficulties with the Minister of Finance and Revenue. He made it clear that Pakistan’s economy required both urgent and long-term remedial action.
The finance minister emphasised that the government understood the present economic problems, but that severe decisions would have to be made in order to mitigate the consequences of inflation on the middle and lower income groups. He emphasised that the government had little influence over many of the issues that had a negative impact on the economy. Exogenous variables such as supply shocks, the commodities super cycle, and the Russia-Ukraine conflict pushed commodity prices further higher. These factors were putting a strain on both the current account and the foreign exchange reserves. The minister added that the government will take steps to decrease the strain on the economy, while simultaneously safeguarding disadvantaged segments of the people.
The minister went on to say that we should try to solve structural challenges so that Pakistan may eliminate its budget deficit and transition to sustainable growth. The finance minister praised the IMF mission commander for his assistance at a challenging period for the world economy. Both parties expressed a strong desire to conclude the evaluation effectively.