Following the Pakistan IMF talks between the government of Pakistan and the IMF in Qatar, the International Monetary Fund (IMF) said in a statement that the subsidy on electricity and oil products in Pakistan was against the agreement. Pakistan’s Finance Minister Muftah Ismail has said that the review talks with the IMF team have been very useful and constructive and the government is committed to reviving the IMF program and moving the country towards sustainable development.
Pakistan’s Finance Minister Muftah Ismail said in a series of tweets: “I have just returned from negotiations with the IMF team in Doha. Our delegation has been very helpful and constructive with the IMF team over the past week. Negotiations have taken place. We have discussed a few economic failures during FY 2022, one of which is to subsidize petrol prices in February this year.
“During the talks, we discussed the targets for the fiscal year 2023 and in the light of rising inflation in the country, declining foreign exchange reserves and growing current account deficit, we need to adopt a tough fiscal policy and strengthen our financial position,” he added. need to. The government is committed to reducing the budget deficit in fiscal year 2023. Talking about the talks with the IMF delegation, he added, “The IMF team has called for an end to subsidies on petrol and electricity prices. This subsidy was given by the previous government in violation of the agreement with the IMF. The current government is committed to reviving the IMF program and putting the country back on the path to sustainable development. ‘
A statement issued by the International Monetary Fund (IMF) following the recent round of talks between Pakistan and the IMF in Doha, Qatar, suggested that oil and electricity subsidies be included in the budget for the next fiscal year. However, the press release issued by the international body did not say anything about the next installment of the loan for Pakistan. It should be noted that talks were held between the IMF and Pakistan in Doha from May 18 to 25 to revive the loan program for Pakistan.
The IMF statement said that positive discussions were held with the Pakistani authorities on policy and reforms which would help in completing the IMF program. The talks focused on a number of positive issues, including measures to reduce inflation and protect the poorest sections of society, including reducing the current account deficit. According to the IMF, the decision to raise the policy rate on May 23 was a positive step. The IMF called for a review of the decision to subsidize electricity and oil products, as well as for concrete policy measures to meet the objectives of the IMF program. According to the IMF, talks will continue with the Pakistani authorities to achieve beneficial economic stability for the people of the country.
The IMF statement described the talks between the two sides as constructive, but did not mention the release of the installment, and said that the IMF would continue talks in the future. It should be noted that Pakistan was hoping to get the next tranche of loan from the IMF. At a time when the government is also facing a political challenge in the country, the fruitless end of the talks could add to the woes of Prime Minister Shahbaz Sharif.
Foreign Minister and Pakistan People’s Party Chairman Bilawal Bhutto said during the World Economic Forum that the previous government’s agreement with the IMF did not reflect the ground realities and “now the situation has changed.” Talking to Reuters, Bilawal Bhutto said, “The deal with the IMF was done before Corona. This is a pre-war deal with Ukraine. Bilawal Bhutto told Reuters that it would be unrealistic to expect a country like Pakistan to fully implement the agreement in the current circumstances. On the other hand, Pakistan’s finance ministry says talks with the IMF will continue next week.
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