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Pakistan

IMF stresses on 'timely, decisive' implementation of policies as virtual discussions to continue

  • In short statement at conclusion of 10-day visit, IMF mission chief says resolute financial support from official partners critical for Pakistan to successfully regain macroeconomic stability and advance sustainable development
Published February 10, 2023

The International Monetary Fund (IMF) issued a short four-paragraph statement at the conclusion of its mission’s 10-day visit to Islamabad, stressing that while it welcomes the official commitment, “timely and decisive implementation of policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability”.

It added that virtual discussions will continue to finalise the implementation details of policies, implying that an agreement to revive the programme through a staff-level agreement may still take some time as Pakistan moves to execute the prior actions.

The statement came after the IMF mission, led by Nathan Porter, held discussions during January 31-February 9 to finalise the action plan under the ninth review of the IMF bailout programme.

“The IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions,” Porter was quoted as saying in the statement.

“Considerable progress was made during the mission on policy measures to address domestic and external imbalances.

“Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector.

“The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development.”

The IMF added that virtual discussions will continue in the coming days to finalise the implementation details of these policies.

The Washington-based lender’s statement comes after it was widely reported by local media and an international news agency that IMF and Pakistan have reached a consensus on reviving the bailout programme, which is crucial for the economy that is now sitting at less than $3 billion of foreign exchange reserves with its central bank.

No official announcement on IMF programme made yet

However, the IMF, while issuing its statement, also clarified that end-of-mission press releases include statements of staff teams that convey preliminary findings after a visit to a country.

“The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion,” it said in a note accompanying the statement.

The development suggests that there may be some time before Pakistan can officially revive the IMF programme. Experts say Pakistan would need to undertake the measures highlighted in the statement before the staff-level agreement.

On Thursday night, Secretary Finance Hamid Yaqoob Shaikh had told media persons that an agreement on actions and prior actions was reached during the technical and policy-level talks with the IMF and staff-level agreement would be reached after the approval from the IMF headquarters in Washington.

The official also acknowledged that there are some differences between the two sides and the solution does not fall within the mandate of the Fund’s mission and the staff team has to explain to their seniors with regard to internal processing of these differences.

Bilal Memon

Bilal Memon is the Head of Digital Content at Business Recorder. His Twitter handle is @bilalahmadmemon

Comments

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Truthisbitter813 Feb 10, 2023 10:55am
So, in a nutshell: Pak economy, and by extension the nation itself, stands screwed.
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Dr fahad Feb 10, 2023 11:08am
@Truthisbitter813, all money went to nation in form of subsidies . We cannot blame govt only . We have population bomb . It’s near to impossible to manage 6.4 million newborn baby every year
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Maqbool A.Bhatti Feb 10, 2023 12:22pm
OGDCL is a working, money earner and profit making organization of Pakistan. Selling its 1/3rd shares to Qatar to get Mirages,( money blockers ) is the MOST STUPID DEAL, one can imagine. If at all sell these shares of OGDCL to our Pakistanis working abroad. You will get Dollars. Fir Allah's Sake stop , stop, stop this and similar deals.
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Imtiaz Ali Feb 10, 2023 12:31pm
I am Mechanical Engineer. I have 2 Years of Piping Experience in EPC project
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Manek Feb 10, 2023 12:48pm
I fully agree with Dr Fahad's views. He is right. Till we do not check our population growth, neither IMF nor God can save our economy. Ours is the fastest growing population in the world. The basic requirement water is getting scarce at a very fast pace. Iran, India, Bangladesh all have controlled their population growth significantly. But Pakistan with a crazy population growth is doomed.
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Johnny Feb 10, 2023 01:25pm
@Truthisbitter813, Extension has extended Pakistan!
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Mian M N Shite Feb 10, 2023 03:09pm
Dar-ul-Fail, Cabinet needs more extension and perks to rescue the economy. Why can't the IMF understand this basic tenet of Pk?
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Hussain Feb 10, 2023 05:32pm
اسلام علیکم : الحمد لله 1947 میں ھم نے آزادی حاصل کی اور اسکی بھاری قیمت بھی دی مگر قوم نے اُن قربانیاں کی قدر نہ کی اور محب وطن ملک سے باہر چلے گہے وقت اور حالات سے تنگ قابل افراد بھی ملک چھوڑ گہے ۔ جن پر بھروسہ تھا انھوں نے خوب مال کمایا اور وطن کو مقروض کردیا ۔اور آج 2023 پوری قوم پریشان حال ھے اور آگے بھی کوہی امید نظر نہیں آتی ۔
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bonce richard Feb 10, 2023 06:02pm
@Dr fahad, I agree that we have control over the growth of our population. Why are our corrupted generals and politicians not bringing stolen money from the United Kingdom and Switzerland, in this way no need to beg for money from IMF? India is also giving subsidies to its people but in a systemic way.
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Ann Feb 14, 2023 09:19pm
Index data
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