Saturday November 27, 2021

Staff level agreement not signed with IMF?

February 15, 2020

ISLAMABAD: The IMF press release did not mention anything about the staff level agreement between Pakistan and the visiting Fund team. It clearly indicates that the staff level agreement could not be finalised yet so talks between the two sides would continue in days to come. The IMF mission has returned and future interaction might be done through video conference or other modes of communication for continuous efforts toevolve a consensus on staff level agreement.

Sources said when all lingering issues will be resolved, then the Memorandum of Financial and Economic Policies (MEFP) will be finalised. After finalising the MEFP document having signatures of Adviser to PM on Finance and Governor SBP, the IMF’s Board would consider approval of the third tranche of $452 million.

Official sources said that the revenue collection target, energy prices and reliance on Chinese trade ties as well as repayment of loans remained the major stumbling block in the way for evolving an agreement on future projection of the Fund-sponsored program. The sources said that the IMF did not agree to the FBR demand for slashing down the target of Rs5,238 billion. The PM had already made it clear that there would be no hike in gas and electricity prices. Pakistan and the IMF team held parleys from February 3 to 14, 2020 and the Fund issued a press statement on the conclusion of talks that clearly indicated that both sides could not finalise the staff level agreement.

Former secretary finance Dr Waqar Masood said one hoped that talks would be concluded soon; however, if it does not succeed, then this will be disappointing as the IMF programme would fall apart early.