The International Monetary Fund (IMF) on Wednesday delayed the revival of the stalled $6-billion programme for Pakistan. In a statement, IMF emphasised upon Pakistan the urgency of “removing fuel and energy subsidies” to achieve programme objectives.
Both sides could not reach an agreement despite week-long negotiations in Doha held between May 18 to 25.
The Fund said it had “emphasised the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the FY2023 budget, to achieve program objectives”.
According to the IMF, the mission held “highly constructive discussions” with the Pakistani authorities regarding policy agreement ahead of the seventh review of the authorities’ reform programme.
The IMF team emphasised the importance of rolling back fuel & power subsidies, which were given by the previous administration in contravention of its own agreement with the Fund.
Govt is committed to reviving the IMF programme & put Pakistan back on a sustainable growth path./
— Miftah Ismail (@MiftahIsmail) May 26, 2022
It added that considerable progress was made during in-person and remote meetings with Pakistani authorities.
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It said both sides agreed on the need for Pakistan to continue to address high inflation, and elevated fiscal and current account deficits.
IMF programme ‘outdated’: Bilawal Bhutto
Foreign Minister Bilawal Bhutto Zardari said the ongoing bailout deal between Pakistan and the IMF was “outdated” given a number of global crises.
Talking to Reuters on the sidelines of the World Economic Forum, he said “This IMF deal is not based on ground realities, and the context has absolutely changed from the time that this deal was negotiated.”
“This deal is a pre-Covid deal. It is a pre-Afghanistan fallout deal. It is a pre-Ukrainian crisis deal. It is a pre-inflation deal,” Bilawal said.
The Minister said it would be unfair and unrealistic to expect Pakistan, a developing country, to navigate geopolitical issues under the current agreements.
“We have to engage with the IMF and we have to keep Pakistan’s word to the international community. However, going forward, it is very legitimate for Pakistan to plead its case.”