IMF says welcomes ‘strong engagement’ with Pakistan

ISLAMABAD: The International Monetary Fund (IMF) is looking forward to continuing discussions with the Pakistani authorities on the set of policies and reforms that could form the basis for completion of the sixth review under the $6-billion Extended Fund Facility (EFF).

This was stated by the IMF resident representative Teresa Dabán Sanchez in response to a query by Business Recorder. She further stated that “we welcome the strong and constructive engagement with the Pakistani authorities and we stand ready to continue supporting Pakistan to achieve the objectives of debt sustainability and strong and sustainable growth, through the implementation of the policies, structural reforms and social spending enhancement envisaged in the EFF-supporting program.”

However, when contacted, officials in the finance ministry expressed ignorance of any date set for discussions on the sixth review and contended that no decision has so far been taken by the government to approach the IMF with the request to club the sixth and seventh review.

An official said that the power sector with specific reference to arresting the flow of the rising circular debt and revenue generation remain challenges for Pakistani authorities. Pakistan has so far not submitted the circular debt management plan to the World Bank, the lead agency in this sector, the official added.

Sources in the Finance Ministry further revealed to Business Recorder that the IMF is fully on board with the unexpectedly favourable macroeconomic data for the past year, particularly with reference to 3.94 percent growth rate, almost double what was projected by the Fund and what formed the basis for the policy matrix in the second to fifth review dated April 2021 and therefore a policy revision is on the cards. However, that would have to be negotiated and the Finance Minister Shaukat Tarin is in the process of finalizing what that matrix may realistically contain.

Copyright Business Recorder, 2021