ISLAMABAD: The International Monetary Fund (IMF) on Tuesday said that Pakistan’s major political parties including Pakistan Muslim League-Nawaz (PML-N), Pakistan Peoples Party (PPP), and Pakistan Tehreek-e-Insaf (PTI) have expressed “written support” for the Standby Arrangement (SBA)’s key objectives and policies ahead of the approaching national elections.
This was revealed in the IMF report, titled, “Country Report, Request for a Stand-By Arrangement”, which was released on Tuesday.
The Staff Statement by the Staff Representative on Pakistan Executive Board Meeting on Pakistan’s Request for a Stand-By Arrangement with regard to the “political assurances”, stated that in recent days, the IMF staff has met with representatives of Pakistan’s major political parties — PML-N, PPP and PTI — and explained the objectives and key policies of the proposed SBA.
“All these parties expressed written support for the SBA’s key objectives and policies ahead of the approaching national elections. They also recognized the role that the SBA will play in preserving macroeconomic stability by anchoring policies and supporting external financing over the coming months,” the report read.
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It added that the confluence of severe exogenous shocks, and political crises at home have exacerbated Pakistan’s economic and financial crises, making it the most challenging period in its history.
The report pointed out that the catastrophic floods in 2022 and global crisis as well as external account imbalance intensified the crisis. It further stated that the post-pandemic expansionary fiscal stance and the subsequent surge in global energy and food crises pressured external accounts and inflation.
“FY2023 has been a year of unprecedented challenges for Pakistan’s economy,” it pointed out, adding that Pakistan’s 2019-23 EFF program encountered implementation difficulties reflecting the external conditions, domestic political situation and to some extent policy missteps.
“There were, nevertheless, several positive structural reforms,” it stated, adding that the decisive action for the independence of the central bank through legislation, the introduction of a market-determined exchange rate regime, ending flow of circular debt in the power sector, expansion of social protection programs, the introduction of new tariff structure in the gas sector, removal of tax exemptions and exit from Financial Action Task Force (FATF) grey list could be counted among the important achievement of the program.
However, it added that the completion of some reviews was delayed, and the 9th review (of total 11 reviews) could not be completed primarily due to the alignment of budget FY24 with staff recommendations and external financing constraints
Copyright Business Recorder, 2023