The International Monetary Fund (IMF) has said that its mission would continue to work with Pakistan to reach an agreement on measures that the government can put in place to provide its economy sound footing. The IMF added that the most important thing for standby arrangement with Pakistan is the Fund's ability to have agreement with the government on measures vital to sustain the economy.
In the transcript of a press briefing by Caroline Atkinson, Director, External Relations Department ofIMF, available on its website on Friday, she said that the IMF is working with Pakistan. "We continue to work with Pakistan to see if we can reach agreement on measures that the government can put in place to put its economy on a sounder footing".
Responding to a question on the withdrawal of increase in petroleum prices, she said that action on energy subsidies, petroleum prices, was not part of the IMF program. "However, energy subsidies consume a large part of the budget. They're inefficient and untargeted so that the bulk of the energy-of the benefit from the energy subsidy goes to higher-income individuals and large companies.
So it will be important for Pakistan to release the money that it's spending on energy subsidies to go towards social spending, education, health reform, dealing with the after impacts of the flood. That would be a better targeted use of spending".
To a question whether the political unrest in Pakistan jeopardises its lending arrangement, Caroline said that the arrangement was due to come to an end at the end of last year, at the end of December, and the IMF extended it for nine months so that it now will expire at the end of September.
"And that's to give space for IMF to continue to discuss with the government the two further disbursements that are allowable under the program and that continues to be the case. What's most important for our arrangement is the ability to discuss with the government, to agree with the government, on the measures that they're going to put in place the economy can support", she added.
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