A few days ago, International Monetary Fund (IMF) said that key progress had been made in talks on the revival of Pakistan’s Fund’s bailout programme. It is quite clear that the country is still struggling to clinch the IMF deal.
Little does perhaps the IMF know that uncertainty surrounding its programme has added to economic instability in the country. The country appears to have met all of IMF conditions but the lender of last resort is still reluctant to take final decision on the revival of programme.
The last disbursement was in February and the next tranche was to follow a review in March, but the PTI government introduced costly fuel price caps as populist measures, which threw fiscal targets and the programme off track.
This action of the previous government seems to have annoyed the IMF. This is why perhaps the Fund does not trust Pakistan. But the incumbent government has acted quite responsibly in relation to Fund’s conditions.
Unfortunately, an initial memorandum on macroeconomic and financial targets and then an official agreement are still awaited. The Fund must remove uncertainty with regard to its programme without any further loss of time.
Haris Qaiser (Islamabad)
Copyright Business Recorder, 2022