ISLAMABAD: Pakistan’s finance ministry said on Saturday it was fully engaged with the International Monetary Fund (IMF) over a $1 billion loan tranche of a $6 billion bailout package, as the seventh review of the program is underway.
Pakistan has so far received little over $3 billion out of the Extended Fund Facility (EFF) scheme, which was agreed in 2019 and scheduled to end in September this year.
Talks between the government and IMF to revive the $6 billion package started on March 4, days after Pakistan announced a substantial cut in prices of petroleum products, electricity, and a tax amnesty scheme for the industrial sector, which economists had warned the international lender may object to.
“The IMF and Finance Division are fully engaged and talks are likely to conclude on a positive note,” Finance Ministry spokesperson Muzzammil Aslam told Arab News.
He said the government had met all end-December fiscal and revenue targets agreed with the IMF, so there were no hurdles.
“The IMF’s review is a process that takes time and obviously there are questions and answers,” Aslam said, adding that the ministry was fully prepared to satisfy the IMF over the recently announced cuts and tax amnesty.
The talks are expected to end next week.
Prime Minister Imran Khan announced on Feb. 28 the slashing of petrol prices by Rs10 and power rates by Rs5 as part of the government's economic relief measures for the public. The prices would be frozen until the next budget in June.
The government estimates the fiscal impact of these measures would be between Rs250 billion ($1.4 billion) and Rs300 billion, depending on international commodity prices.
Aslam said the government will be able to fill the fiscal gap that the relief program will generate.
“We have extended this relief to the public after meeting all the IMF targets,” he added. “Our economic growth is robust, tax revenues and exports are registering increase, therefore the government is in a position to provide relief to the public.”
