ISLAMABAD: The IMF’s Managing Director has replied back to Prime Minister Shehbaz Sharif before the announcement of the budget for 2023-24 and conveyed to Islamabad clearly the fulfilment of three conditions for striking staff-level agreement.
These three conditions from the IMF included meeting external financing requirements in line with the Fund assessment, presenting and approving the budget for 2023-24 aligned with the IMF requirements, and introducing market- based exchange rate for moving towards staff-level agreement.
Although, Pakistani authorities claimed that they did not receive any response from the IMF after the announcement of the budget, however, both sides preferred to keep mum about the response of the IMF’s Managing Director to the Prime Minister of Pakistan which was conveyed before the announcement of the budget for 2023-24.
The sources claimed that the IMF’s MD responded to Prime Minister Shehbaz Sharif’s telephone conversation with clarity and conveyed that the staff-level agreement would only be done after fulfilment of the given guidelines of the IMF staff.
This correspondent sent out questions to both the IMF in Washington DC and the Islamabad office as well as the Ministry of Finance but got no official response from any side till the filing of this report.
On the other hand, Pakistan’s Minister for Finance Ishaq Dar is still hopeful about the revival of the IMF and went on to say that there were no reasons for any delay in the staff-level agreement. While addressing the ICAP post-budget seminar here in Islamabad on Monday evening, Mr Dar said that the government fulfilled all tough measures including imposing Rs170 billion taxation measures in last February 2023 and other steps as well for reviving the IMF programme.
On the external financing gap, the minister said that the IMF assessed an external financing gap of $7 billion on account of the increased current account deficit but it decreased to just $3.3 billion in the first ten months of the current fiscal year against $13.7 billion in the same period of the last financial year. Now the current account deficit was projected at $4 billion for the ongoing financial year ending on June 30, 2023. The financing gap on external accounts, he said, should have been reduced but the IMF was still stuck to its old number.
“I am still hopeful for striking Staff Level Agreement (SLA)” he said and added that some internal and external forces were looking for becoming Sri Lanka but it did not happen and would never happen in the case of Pakistan.
He said that the government opted for the strategy to slash the current account deficit and did it rightly so in order to avert a crisis. “We have reversed downward trends of the economy and now the path of stabilisation and growth will commence,” he said.
He was of the view that there was a need to give hope to the businessmen as he held meetings with Chambers in the last several weeks and every apprised him that after meeting you the confidence was restored. As a professional, he urged the Chartered Accountants to play their role and help businessmen to restore their confidence that the ongoing unusual and difficult phase could be overcome by joining hands.