IMF seventh review expected to be prolonged

The ongoing seventh review of the $6 billion Extended Fund Facility program is likely to be prolonged due to the announced Prime Minister relief measures as well as political situation.

Sources said that Pakistan and the IMF representative are discussing matters related to the economy in ongoing talks.

The Resident Representative of the International Monetary Fund (IMF) for Pakistan Esther Perez Ruiz on a query replied that “the authorities and the IMF will continue to discuss recent developments and other measures to promote macroeconomic stability.”

It is pertinent to note that Prime Minister Imran Khan on February 28, 2022, announced a reduction of prices of petroleum products by Rs10 per litre, cut in electricity price by Rs5 per unit, and a targeted tax amnesty scheme for the industrial sector.

Sources said that the Prime Minister’s relief package would have neither any impact on fiscal deficit nor increased borrowing.

Funding would be made available through dividends of oil companies, the Public Sector Development Program and the Covid-19 fund, sources added.

These relief measures were the most pressing need and there was no impact on budgetary numbers.

Sources also said that both sides are also discussing the proposals with regard to next year’s budget keeping in view the macro-economic framework.

Pakistan and the IMF started negotiations on the ongoing seventh review of the $6 billion Extended Fund Facility program on March 4, 2022.

Sources said that there is no cut off date of ongoing talks as Pakistan and IMF negotiations continued for seven weeks in September last year.


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