ISLAMABAD: The International Monetary Fund (IMF) review mission, headed by Nathan Porter, met with Pakistan’s Finance Minister Ishaq Dar on Tuesday and stated that they expected Pakistan will fulfill IMF obligations on schedule.
The IMF team is in Pakistan to discuss strategies for reestablishing domestic and international sustainability, fortifying the nation’s fiscal position, and for reforming the electricity sector.
The agenda for economic and fiscal policies and reforms to complete the 9th review under the Extended Fund Facility was discussed and reviewed during the meeting (EFF).
“The finance minister briefed the team on the government’s fiscal and economic reforms and actions in sectors such as closing the fiscal gap, maintaining exchange rate stability, and developing the energy sector.”
“He claimed that reforms are underway in the power industry and that a high-level committee established strategies to counter circular debt threat in the gas sector.”
Dar reaffirmed the government’s commitment to finishing the current IMF program and pledged Pakistan’s cooperation with the IMF to reach an agreement on concluding the review under the EFF.
Porter voiced his belief that Pakistan will fulfill the IMF’s conditions to complete the 9th review at the time.
He hoped that Pakistan would keep making changes in numerous sectors and would successfully and on time finish the IMF program.
He further stated that Pakistan and the Fund would collaborate on fiscal reforms.
“IMF Approves Continued Negotiations, Pakistan Avoids Default with Market-Driven Exchange Rate”
“The IMF’s consent to continue negotiations under the EFF review allows Pakistan to narrowly avoid defaulting on its international payments.”
“The government gave up control of the exchange rate and let market forces determine the value of the rupee to restart the delayed $6.5 billion loan program, set to begin early next month if successful.”
However, “The IMF program’s resumption will enable the country to increase its foreign exchange reserves, avoid imminent default risk, and attract $3-4 billion in new foreign loan inflows within a few months.”
while the prime minister has expressed confidence that Pakistan will reach an agreement with the IMF this month to address its financial issues, the IMF program will have unfavorable effects, including significant inflation starting in February in the region of 29-31%.
