Pakistan ready to meet all conditions to revive IMF loan programme
Government requested global lender to send its mission to Islamabad as soon as next week
Islamabad: Pakistan government has conveyed its willingness to accept all key conditions of the International Monetary Fund (IMF) to revive the loan programme as the country faces a massive economic crisis. Pakistani media reported that the government has requested the global lender to send its mission to Islamabad as soon as next week to conclude a long-awaited agreement.
Secretary Finance Hamed Yaqoob Shaikh has formally written to the IMF mission chief to visit Pakistan as “the government has concluded that there is no other choice but to revive the IMF programme on an immediate basis” Pakistani newspapers reported. The approval came after weeklong consultations, including two sessions that were presided over by Prime Minister Shehbaz Sharif. The prime minister has said that the Pakistan government has “no other option” but to implement the IMF programme as the government could not offer reasonable subsidies to any critical sector or even help the flood-affected people without consulting IMF.
Pakistan entered the $6 billion IMF programme in 2019, which was raised to $7 billion this year. Pakistan will get $1.18 billion after the programme’s ninth review, which is currently pending.
IMF conditions and reforms
Pakistan government has reportedly agreed to implement all four IMF conditions following the interactions on the sidelines of the Geneva conference. The major IMF conditions include a market-based exchange rate, an increase in electricity and gas prices, and additional taxes to contain the fiscal deficit.
State Minister for Finance Aisha Ghaus Pasha said Pakistan had conveyed to the IMF that it was ready to implement reforms and wanted to settle the outstanding issues. However, the agreement is taking longer as the government wants to implement the reforms and revive the IMF pro-gramme in a way that does not burden the common people any further, she said. “We want to adopt a mixed course. It is an extraordinary time because we did not take a corrective path for decades,” she told reporters.
Pakistan’s power regulator has already allowed Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company (SSGC) to hike natural gas rates up to 75 per cent. The government has 40 days to approve the increase or it will automatically come into effect.
Pakistan has been facing a severe economic crisis amid dwindling forex reserves and currency depreciation. Experts say that the IMF programme is critical for Pakistan, which urgently needs external financing to support the battered economy.