Pakistan seeks more funds from IMF

Wednesday 27th April 2022 07:14 EDT

Islamabad: Pakistan has sought an increase in the size and duration of its $6 bn International Monetary Fund (IMF) programme, the country’s finance minister, Miftah Ismail, has said. Ismail made the comments in a video statement following talks with the IMF in Washington. It came after the fund said Islamabad has agreed to roll back subsidies to the oil and power sectors ahead of a resumption next month of a review of the IMF’s support for the country.

“I’ve requested the fund and I think they have, largely, agreed to extend this programme for another one year,” he said. “I’ve also requested that they enhance the funding available to Pakistan from $6 billion under this programme to perhaps a little bit more.” The details will be decided when the mission comes to Pakistan in May, he said.

“Based on the constructive discussions with the authorities in Washington, the IMF expects to field a mission to Pakistan in May to resume discussions over policies for completing the 7th EFF review,” the IMF said in a statement, referring to its Extended Fund Facility programme.

This covers $6 bn of support the IMF agreed in 2019 to extend to Pakistan. The IMF suspended its loan to Pakistan in 2020 after the country failed to meet the conditions. The plan was revived last year after removed premier Imran Khan’s administration agreed to tougher conditions, including raising oil prices and electricity tariffs although a few months later he rolled back the increases to soothe public anger over rising living costs.

The IMF also said the Pakistani authorities had requested to extend the EFF arrangement through June 2023 after the talks in Washington agreed to drop the subsidies. From April to June, Pakistan will be giving more than $2 bn of subsidies to the oil and power sectors. According to former finance minister Shaukat Tarin, the IMF had previously questioned how the government could fund that without risking a high fiscal deficit. If the IMF review is cleared, Pakistan will get more than $900 mn, which will also unlock other external funding.

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