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Wednesday June 19, 2024

Pakistan made significant progress on new loan: IMF

Fund’s Mission Chief Nathan Porter said that the IMF and Pakistani have made significant progress toward new loan programme

By Our Correspondent
May 25, 2024
The International Monetary Funds (IMF) building in Washington, United States. — AFP/File
The International Monetary Fund's (IMF) building in Washington, United States. — AFP/File

ISLAMABAD: After handing over a long list of demands, the assessment mission of International Monetary Fund (IMF) has returned to Washington without signing any Staff Level Agreement (SLA) on Pakistan’s request to provide fresh medium-term bailout loan package under Extended Fund Facility (EFF).

However, Fund’s Mission Chief Nathan Porter said that the IMF and Pakistani have made significant progress toward new loan programme.

The long list of IMF demands focused on improved public financing through mobilisation of revenues and rationalisation of expenditures, fixing cash bleeding energy sector, lowering inflation, adoption of appropriate monetary and exchange rate policies; improving public service provision through state-owned enterprise (SOE) restructuring and privatisation; and promote private sector development by securing a level-playing field for investment and stronger governance.

Now the government would have to present and pass an aligned budget from Parliament then the IMF would finalise the SLA in July this year. It also includes hiking of power and gas tariffs.

According to the IMF statement issued on Friday, at the request of the Pakistani authorities, an IMF team, led by Nathan Porter visited Islamabad during May 13-23 to discuss Pakistan’s plans for a home-grown economic programme that can be supported under the EFF. At the end of the visit, the IMF Mission Chief issued the following statement:

“Building on the economic stabilisation achieved through the successful completion of the 2023 Stand-by Arrangement, the IMF and the Pakistani authorities made significant progress toward reaching a Staff Level Agreement on a comprehensive economic policy and reform programme that can be supported under an Extended Fund Facility.

“The authorities’ reform programme aims to move Pakistan from economic stabilisation to strong, inclusive, and resilient growth. To achieve this, the authorities plan to continue to strengthen public finances to reduce vulnerabilities by improving domestic revenue mobilisation through fairer taxation while scaling up spending for human capital, social protection, and climate resilience; secure energy sector viability, including reforms to reduce the high cost of energy; continue progress towards low and stable inflation by appropriate monetary and exchange rate policies; improve public service provision through state-owned enterprise (SOE) restructuring and privatisation; and promote private sector development, by securing a level-playing field for investment and stronger governance.

“The mission and the authorities will continue policy discussions virtually over the coming days aiming to finalise discussions, including the financial support needed to underpin the authorities’ reform efforts from the IMF and Pakistan’s bilateral and multilateral partners.

Meanwhile, the Federal Board of Revenue (FBR) announced that so far more than 17,000 retailers have been registered into Tajir Dost Scheme and hoped that more would be included into the scheme.