Pakistan, IMF come closer to ‘finalise’ loan revival deal

The efforts of Prime Minister Shehbaz Sharif have borne fruit as the International Monetary Fund and Pakistan have come closer to the final deal, reported 24NewsHD TV channel on Saturday.

According to sources, all the obstacles in the revival of IMF’s ninth review and restoration of the bailout programme have been removed. An official announcement is expected soon, they added.

They said that progress was made in this regard following the meeting of Prime Minister Shehbaz Sharif with IMF Managing Director Kristalina Georgieva in Paris.

Sources maintained that the breakthrough came after continuous and regular contact and meetings between the two in Paris.

They further divulged that negotiations between the finance ministry team led by Ishaq Dar and the IMF team have been going on for the last three days.

The process of preparing a new draft continued and the IMF and finance ministry gave it a final shape on Saturday morning.  

Sources said that Finance Minister Ishaq Dar and his team were busy for the last three days to settle all issues. They said if no further problems or technical difficulties arise between the IMF and Pakistan, the ninth review would be completed.

Major amendments in budgetary framework expected

According to sources, major amendments are expected in the framework of the budget for the next financial year before its approval by the Parliament for the staff-level agreement between Pakistan and the IMF.

The Fund has asked Pakistan to modify the budgetary framework for 2023-24 prior to its approval.

Sources said that the State Bank of Pakistan has lifted restrictions on imports and has fulfilled the IMF's condition by allowing the supply of foreign exchange for the clearance of containers.

Pakistan and the IMF are making efforts to reach an agreement on the budget framework.

The finalization of the framework will pave the way for the approval of the annual budget.

Under the revised framework, FBR's tax targets are likely to be raised and the government will reduce its expenditure.

Pakistan has shared the revised budget estimates for the upcoming fiscal year with the IMF.

The ongoing $6.7 billion programme of the IMF's Expanded Fund Facility is scheduled to expire on June 30, 2023.

The IMF highlighted three major problems, including the failure to raise taxes in the budget framework, eliminating tax expenditures and tax amnesty schemes; bridging the economic gap from abroad; and fixing exchange rates based on the third market.

 

Reporter Awais Kiyani