Virtual talks with IMF: Hopes stay high

Things are progressing positively with the International Monetary Fund (IMF), sources in the federal finance ministry said on Thursday.

The IMF was informed about government actions and the progress on the implementation of the conditions, the insiders said as Pakistan and the Fund resumed their talks over the release of the ninth tranche of the Extended Fund Facility (EFF).

They added that the process of implementing conditions for an early agreement with the IMF has been expedited and the ninth review is expected to be successfully completed soon. The government has increased the prices of electricity, gas and petrol while a mini-budget was presented in Parliament under IMF conditions.

The sales tax rate on all items increased from 17 to 18 per cent while the revised circular debt management plan has been approved, the ministry officials said. According to a report, Finance Secretary Hamed Yaqoob Sheikh said: “Duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest”.

The IMF, however, said in an earlier statement that both sides had agreed to stay engaged and “virtual discussions will continue in the coming days to finalise the implementation details” of the policies discussed in Islamabad.

As per a foreign news agency, talks between the International Monetary Fund and Pakistan were to be resumed virtually as the two sides look to reach a deal to unlock funding critical to keep the cash-strapped south Asian country afloat.

IMF issued a statement at the conclusion of its mission’s 10-day visit to Islamabad, stressing that “timely and decisive implementation of policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability”.

It had 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 IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions,” the mission chief, Nathan 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.”