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Pakistan

Pakistan to take fiscal measures set by IMF to meet budgetary targets: Dar

  • Measures include reviewing subsidies in the farming and export sectors and shedding energy sector debt
Published January 11, 2023

ISLAMABAD: Pakistan will take fiscal measures set by the International Monetary Fund (IMF) to meet its budgetary targets for the 2022-23 financial year, Finance Minister Ishaq Dar said on Wednesday.

The measures included reviewing subsidies in the farming and export sectors and shedding energy sector debt, he said.

The minister told a news conference in Islamabad that a “detailed discussion” had taken place with the IMF on the sidelines of the climate conference in Geneva on Monday, where the lender had emphasised a need to take the fiscal measures.

A 9th IMF review to clear the release of the next tranche of funds to Pakistan has been pending since September, as the country faces a severe economic crisis with its central bank foreign reserves falling to a critical level of below $5 billion.

“They (IMF) think that we should take some fiscal measures, like if there are some un-budgeted subsidies,” he said, adding the latest discussion had narrowed down the issues on the IMF’s agenda.

“We will achieve all our budgetary targets,” he said.

Ball is in our court now, says PM Shehbaz post Geneva conference

Dar said that the IMF had taken up the subsidies in the export and farmers sectors and the energy reforms, adding: “We will do it but it wouldn’t burden any common man, it will be very targeted and categorical.”

The minister did not elaborate on whether the subsidies would be cut or withdrawn altogether, saying it would be worked out, adding that the gas sector debt would be reduced from dividends of the companies.

Pakistan’s power regulator has already allowed Sui Northern Gas Pipeline Ltd (SNGPL) and [Sui Southern Gas Company (SSGC) to hike rates up to 75%, which is subject to cabinet approval.

The IMF approved the seventh and eights reviews of Pakistan’s bailout programme, agreed in 2019, together in August to allow the release of more than $1.1 billion.

Pakistan secured a $6 billion bailout in 2019, that was topped up with another $1 billion earlier this year.

Comments

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Mushtaque Ahmed Jan 11, 2023 11:56pm
IMF prescription is an anti-biotic for the economy that must be taken ASAP. The longer the delay the economic disease will only become more complicated and make the recovery difficult. So why the dilly dally?
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Haroon Jan 12, 2023 03:47am
I am very much in favour of raising gas prices including for industries like textiles and fertilizers. Our fertilizer is already cheaper than international market which leads to smuggling abroad. Rationalizing gas prices in fertilizer sector will move urea prices in line with international market while eliminating further build-up of circular debt.
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