IMF, Pakistan fail to reach an agreement on revival of EFF program

The International Monetary Fund (IMF) Wednesday concluded talks with the Pakistan team for the revival of the Extended Fund Facility Program and stressed taking concrete policy actions, including in the context of removing fuel and energy subsidies and the FY2023 budget, to achieve program objectives.

An IMF mission led by Nathan Porter held both in-person and virtual discussions in Doha,  Qatar with the Pakistani authorities during May 18-25 on policies to secure macroeconomic stability and support sustainable growth in Pakistan.

“The mission has held highly constructive discussions with the Pakistani authorities aimed at reaching an agreement on policies and reforms that would lead to the conclusion of the pending seventh review of the authorities’ reform program, which is supported by an IMF Extended Fund Facility arrangement, Mr Porter said in a statement after the conclusion of the discussions.

Considerable progress was made during the mission, including the need to continue to address high inflation and the elevated fiscal and current account deficits, while ensuring adequate protection for the most vulnerable.

In this regard, the further increase in policy rates implemented on May 23 was a welcome step.

On the fiscal side, there have been deviations from the policies agreed in the last review,  partly reflecting the fuel and power subsidies announced by the authorities in February, he added.

“The IMF team looks forward to continuing its dialogue and close engagement with Pakistan’s government on policies to ensure macroeconomic stability for the benefit all of Pakistan’s citizens”, he added.

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