ISLAMABAD: The International Monetary Fund (IMF) has provided a list of necessary steps and made it clear to Pakistani authorities that Islamabad must take action to meet all requests within the next 15 to 20 days in order to restart the halted Fund program. The IMF told the Pakistan authorities that the time has come to take “all required actions.”
A timeframe of two to three weeks has been given for implementing all required actions paving the way for a staff-level agreement and releasing of $1 billion tranche under the Extended Fund Facility (EFF).
Ishaq Dar, the finance minister, is scheduled to speak with his core economic team in a few days to reach an agreement on the steps that must be completed in the next few weeks to clear the way for the resumption of the IMF program.
“Now the ball is in the court of Islamabad whereby the IMF asks the government to take actions on account of fixing cash-bleeding energy sector including power and gas, taking additional taxation measures and pursuing structural reforms in the remaining period of the Fund program,” top official sources was quoted as saying in The News.
On Thursday, Pakistan and the IMF officials held another round of virtual talks, in which the finance minister assured the lender that Pakistan was expecting to receive dollar inflows from one friendly country by late Dec or early Jan, keeping in view dwindling foreign exchange reserves held by the State Bank of Pakistan that nosedived to $6.11 billion.
The sources said the Finance Ministry asked the Energy Ministry to revise the roadmap for trimming the Circular Debt Management Plan (CDMP) for 2023.
The revival of the IMF program through patchwork may not succeed, according to independent analysts, so the government would have to come up with a workable plan to eliminate the monstrous circular debt that has accumulated in both the electricity and gas sectors, amounting to a staggering total of Rs 4 trillion. In response to the current fiscal year’s increased budget deficit brought on by flood-related expenses, the IMF has agreed to provide an adjustment of Rs 340 billion.
The IMF also asked Pakistan to take additional measures for bridging the yawning gap for materializing the FBR’s envisaged target. The IMF has assessed that the FBR might not achieve the desired revenue collection target of Rs 7,470 billion for the current fiscal year. The IMF also expressed concerns that the number of filers so far stood below three million income tax filers as it stood at 2.913 million against 3.4 million received in the last fiscal year.
