IMF Resident Chief reacts over the relief package announced by PM Khan

IMF Resident Chief reacts over the relief package announced by PM Khan

ISLAMABAD – The International Monetary Fund (IMF) would review the relief package recently announced by Prime Minister Imran Khan to cut petroleum and electricity prices, it emerged on Wednesday.

The merits of the relief package, for which the government is expected to dole out around Rs360 billion, would be discussed by IMF officials with Pakistani authorities during its seventh review under the $6 billion Extended Fund Facility (EFF) program, reports said.

The IMF’s Resident Chief in Pakistan, Esther Perez Ruiz, told The News that Pakistani authorities and the IMF would discuss the recently-adopted relief package and other measures to promote macroeconomic stability amidst a challenging external environment.

The IMF team would hold two-week-long virtual talks for its seventh review, starting from March 4.

A day earlier, an official of the Ministry of Finance ruled out the possibility IMF would object to the prime minister's move, saying the relief amount would be arranged by “cutting” various expenditures.

PM Khan on Monday slashed petroleum prices by Rs10 per liter and the power tariff by Rs5 per unit. He also announced some other relief measures, mainly for the information technology (IT) sector.

The move comes at a time when Pakistan's opposition parties are pushing for a no-confidence motion in parliament to dislodge PM Khan’s government.

“This is a Rs250-Rs300 billion relief package and will be met through cutting different expenditures,” says Muzzamil Aslam, a spokesman for Pakistan’s finance and energy ministries.

Apart from the cuts, the premier has promised to freeze further increase in energy prices until the next budget, which will be announced in June.

The announcement of the relief package came a month after the IMF approved $1 billion disbursement to Pakistan after completing a sixth review of the country’s reforms under its $6 billion loan programme secured in 2019.