IMF programme strikes balance between economic reforms and social protection: Hammad

ISLAMABAD: Pakistan’s program with International Monetary Fund (IMF) strikes an appropriate balance between economic reforms and social protection, Federal Minister for Finance and Revenue, Hammad Azhar said here.

“The social sector spending had been considerably enhanced while the reforms being introduced by the government in the energy sector would ensure that subsidies are better targeted to protect the smallest consumers,” he said in a written reply to a question in the National Assembly.

He said that the government was fully cognizant of the impact of the program on the vulnerable segments of the society, adding the reforms, therefore, had a strong social protection and inclusion element.

“The annual allocation for BISP in the current financial year is Rs180 billion as compared to last year’s Rs118 billion,” he said adding that this was supplemented by an additional Rs70 billion under the Prime Minister’s Covid-19 relief package.

Additionally, in April 2020 the Prime Minister launched the Ehsaas Emergency Cash (EEC) program to provide immediate one-time cash assistance (Rs.12,000 per beneficiary) to potentially over 14 million families.

Furthermore, the program also covers increased spending by the federal and provincial governments on health and education.

He said, the economic reform agenda adopted by the government in July 2019, with the technical and financial support of the IMF, remains on track as it aims to address structural imbalances in the economy for sustainable and inclusive growth in the future.

The reform measures aim to improve fiscal discipline; debt sustainability; tax base and revenue generation and cost recovery in energy sector through timely tariff adjustments and rationalization of subsidies.

In addition it also aims at improving performance of state owned enterprises (SOEs); the effectiveness of AML/CFT regime.

He said, the government had entered into an IMF program in July 2019 and the first review was conducted successfully in December 2019.

Thereafter, although the government remained engaged with the IMF, periodic reviews could not take place because of the pandemic.

Negotiations on the pending reviews, second to fifth, were completed on February 16, 2021 with conclusion of a staff-level agreement to take the program forward.