Islamabad, May 17: Pakistan and the International Monetary Fund (IMF) will begin review talks in Doha from Wednesday for a week as a means to renew the effort to get a staff-level agreement for release of $1 billion tranche under the Extended Fund Facility (EFF). “Pakistan’s delegation, led by secretary finance, will hold parleys with the IMF review mission, and after completion of the first round of technical talks, Minister for Finance Miftah Ismail is also expected to join the team in policy-level discussions. These talks will kick-start on May 18. And will last till May 25, 2022 in Doha,” The News International quoted top official sources as saying.
The Pakistan team will include Ministry of Finance, Federal Board of Revenue, and State Bank of Pakistan, including Secretary Finance, Additional Secretary, Ministry of Finance, External, Additional Secretary Budget, Additional Secretary C&F, Acting Governor SBP, and Deputy Governor, chairman FBR and Members IRS and Customs Policy Wings and Ministry of Energy and Power. According to The News International, in one of the most important rounds of parleys for the economic team of Pakistan, Islamabad will have to convince the IMF to revive the stalled $6 billion programme at a time when the government had not yet moved towards eliminating the unfunded fuel subsidy despite making a commitment with the Fund.
It is speculated that the PM Shehbaz Sharif-led government is likely to offer withdrawing the unfunded fuel subsidy. If a consensus is reached among the coalition parties. A top official said, “We want to use it as a bargaining chip because we know that the IMF staff always stressed doing more. It is part of a strategy to move ahead if the IMF seems in a mood to move ahead.”
The IMF is all set to ask policymakers for further tightening of fiscal and monetary policies; it will recommend taking additional taxation measures in the upcoming budget, The News International reported. The IMF has already asked Pakistan to hike the FBR’s tax collection target of Rs 7,255 billion for the next budget against the desired target of Rs 6,100 billion for the current fiscal year. It also urged Islamabad to increase the policy rate by 100 to 150 basis points in the coming monetary policy.
(Except for the headline, this story has not been edited by Business Upturn staff and is published from a syndicated feed.)