The International Monetary Fund said Pakistan has made “substantialprogress” toward meeting policy commitments needed to unlock billions ofdollars in loans the country needs to avoid a default but “few remainingpoints are yet to be finalized”, reported Bloomberg.com.
Pakistan has taken tough measures including increasing taxes and energyprices, and allowing its currency to weaken to restart a $6.5 billion IMFloan package. The funds will offer some relief to a country still reelingfrom last year’s devastating floods and help pull the economy out of acrisis ahead of elections this year.
“A staff-level agreement will follow once the few remaining points areclosed,” said Esther Perez Ruiz, the IMF’s resident representative forPakistan, adding “Ensuring there is sufficient financing to support theauthorities in the implementation of their policy agenda is the paramountpriority.”
Finance Minister Ishaq Dar said last week that the IMF wanted to seecountries finalize commitments they’ve made to help Pakistan shore up itsfunds before signing off on the bailout package. Pakistan needs to repayabout $3 billion of debt by June, while $4 billion is expected to be rolledover.
In a statement, Ruiz said the lender wasn’t consulted on the government’splan to raise fuel prices for wealthier motorists to finance a subsidy forlower-income people.
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“Fund staff are seeking greater details on the scheme in terms of itsoperation, cost, targeting, protections against fraud and abuse, andoffsetting measures, and will carefully discuss these elements with theauthorities,” she said.
EFF is a financial arrangement between the IMF and a member country,providing economic support and policy guidance over an extended period. Theninth EFF review for Pakistan is of particular significance as it willdetermine the release of the next tranche of funding.