Govt committed to reviving IMF programme, says Miftah after talks end

Minister for Finance and Revenue Miftah Ismail on Thursday said that the government remains committed to reviving the International Monetary Fund (IMF) programme, a statement that comes after talks on the 7th review under the $6 billion Extended Fund Facility (EFF) remained inconclusive.

The Fund pointed out ‘deviations’ on fiscal sides from the policies agreed in the last review. Resultantly, no staff-level agreement was reached on Wednesday while the revival of $6 billion EFF was delayed.

The Fund emphasised the urgency of concrete policy actions, including removing fuel and energy subsidies and the fiscal year 2023 budget, to achieve programme objectives. The IMF statement also indicated that the government would be taking prior actions in the federal budget for fiscal year 2022-23. The revival of stalled programme can be expected by end of July/August 2022.

Taking to Twitter, the finance minister, who returned from Doha after leading Pakistan's side of the talks, said that the government delegation had very useful and constructive discussions with the IMF team over the last week.

“We discussed significant slippages in FY22, caused in part by the fuel subsidies given in February 2022,” said Ismail.

The minister informed that the delegation discussed targets for FY23, where, "in light of high inflation, declining forex reserves and a large current account deficit, we would need to have a tight monetary policy and consolidate our fiscal position".

“Thus the government is committed to reducing the budget deficit in FY23,” he said.

Ismail added that the IMF team emphasised the importance of rolling back fuel and power subsidies, which were given by the previous administration in “contravention of its own agreement with the Fund”.

However, "the government is committed to reviving the IMF programme & put Pakistan back on a sustainable growth path", he added.