Pakistan, IMF begin crucial talks in Doha as economy stumbles

Crucial talks between Pakistan and the International Monetary Fund (IMF) have commenced in Doha today (Wednesday), for revival of the stalled $6 billion Extended Fund Facility (EFF) programme.

“Talks with the IMF Mission started today,” the Finance Ministry tweeted on Wednesday.

The ministry said that Finance Minister Miftah Ismail, Minister of State Dr Aisha Ghous Pasha, Finance Secretary Hamed Yaqoob Shaikh, Acting Governor State Bank of Pakistan (SBP) Dr Murtaza Syed, Chairman Federal Board of Revenue (FBR) Asim Ahmad and senior officers from the Finance Division will attend the talks virtually.

The IMF mission will discuss with the Pakistani authorities policies to further the EFF's 7th review. Pakistan has also requested the IMF to extend the EFF arrangement through June 2023 as a signal of its commitment to address existing challenges and achieve the programme objectives. It has further asked the international lender to increase the funding by $2 billion.

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Experts have pointed out that the revival of the IMF programme is vital for the economic stability of the country, which has been marred with depleting foreign exchange reserves and a rising import bill.

The IMF has said prompt action is needed to reverse fuel subsidies in the country, and the issue has slowed discussions for the fund's 7th review. The newly formed government remains reluctant to do so, possibly because of fears that the removal of subsidies would add to the already high inflation rate and could prove to be a politically unpopular decision.

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Miftah Ismail has said the government is not doing away with subsidies for now, although it may reconsider this later. Talking to media persons, Ismail hinted at a price hike in the future if oil prices in the international market stay on their current trajectory.

“I am not saying we will not increase fuel prices. But, for now, we are not increasing petrol prices. We cannot afford to burden the masses further. PM Shehbaz has asked me not to increase the fuel prices,” he said.