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IMF board approves $7bn loan programme for Pakistan [Post Updated #474]

ormer prime minister Imran Khan has said he’s confident of returning to power this year, and would back a continued role for the International Monetary Fund (IMF) to prop up the economy and stave off a growing risk of a debt default.

The PTI chairman said in an interview with Bloomberg that he expected to win a majority when elections were held.

He said he’s preparing a “radical” plan to shore up an economy that he predicts will be in even worse shape by then.

“If we get into power, we won’t have much time,” the 70-year-old politician said at his residence in Lahore, where he’s recovering from a leg injury sustained when he was shot at a protest in November.

Asked if his plan would involve sticking with the IMF — whose accord for about $6.5 billion of lending to Pakistan has seen multiple delays — he said: “We have no choice now.”

Express Tribune
 
Right now the pain of avoiding a default has become greater than default itself. Power cuts, lack of food supplies.... if the plan is to starve the populace of the basics to save reserves.... Dar, Sharif, Establishment et all need to ask what's the point?! How long does the nation continue to beg?
 
An International Monetary Fund (IMF) delegation will be visiting Islamabad from January 31 to February 9 to continue discussions regarding the ninth review of the $7 billion Extended Fund Facility (EFF), an official said on Thursday.

Pakistan entered a $6 billion IMF programme in 2019, which was increased to $7bn last year. The programme’s ninth review, which would release $1.18bn, is currently pending.
 
The government has prepared two draft ordinances to impose Rs200 billion in new taxes, an official said on Saturday, days after the government accepted International Monetary Fund’s (IMF) demands to resume a stalled loan programme.

The government is also mulling discontinuing the power sector subsidy and unleashing sales tax on raw materials for the export sector, especially textile industrialists — measures that can ruffle the feathers of the PML-N’s core constituency in an election year. More hikes in electricity and gas tariffs are also on the agenda.

Meanwhile, PML-N Senior Vice President Maryam Nawaz Sharif, who returned to the country on Saturday after a nearly four-month sojourn in London, has come forward in defence of embattled Finance Minister Ishaq Dar and asked the nation to have faith in him to steer the deteriorating economy out of the quagmire.
 
Beggars can't be choosers. The government's hands are tied. They need to impose unpopular measures to get the dollars and function the country.. there needs to be a long term solution to curb this debt and generate new streams of income!
 
Pakistan, already hurt by the unfulfilled commitments made by foreign nations promising cash deposits worth $5 billion, will today (Tuesday) lock horns with the International Monetary Fund (IMF) in one of the toughest negotiation sessions ever to revive the $6.5 billion bailout package.
 
The International Monetary Fund (IMF) on Tuesday expressed concerns that the opposition might create hurdles in the way of implementing tough economic decisions, urging the government to meet all the “requirements” for the completion of the much-delayed programme review.

Nathan Porter, the visiting mission chief of the IMF, raised the question about the implication of the opposition’s role in difficult decisions that Pakistan would have to take to avoid the default.

He expressed these concerns during the opening round of 10-day-long talks, according to the government officials.

Finance Minister Ishaq Dar led the Pakistani delegation.
 
The International Monetary Fund (IMF) has rejected the circular debt management plan (CDMP) presented by the government and asked the authorities to raise the electricity tariff by Rs12.50 per unit in order to restrict the additional subsidy at Rs335 billion for the current fiscal year, according to a The News report published Thursday.

An IMF mission is currently in Pakistan holding talks on the ninth review that will continue till February 9 after which a staff-level agreement is expected between the two sides.

During the second day of technical-level talks, the Washington-based lender termed the revised CDMP as “unrealistic”, which is based on certain wrong assumptions. So the government will have to bring more changes in its policy prescription to restrict the losses of the cash-bleeding power sector.

The IMF and the Finance Ministry will work out a gap on the fiscal front after which different additional taxation measures will be finalised through the upcoming mini-budget.

Debt management plan
The revised CDMP envisages an increase in the monster of circular debt to the tune of Rs952 billion for the current fiscal year against an earlier projection of Rs1,526 billion.

The government shared its revised plan with the IMF high-ups on Wednesday, which shows the government required an additional subsidy of Rs675 billion despite raising the power tariff in the range of Rs7 per unit through quarterly tariff adjustment in the first two quarters of 2023 and Rs1.64 for the third quarter from June to August.

“The IMF has opposed the certain basis of the revised CDMP and asks the government to raise the tariff in the range of Rs11 to Rs12.50 per unit, so that the requirement of additional subsidy could be reduced to half from its existing levels of Rs675 billion for the current fiscal year,” sources confided to the publication.

The IMF also raised questions on how the government calculated its additional subsidy requirement figure of Rs675 billion for the current fiscal year. The government has understated the exchange rate for calculating the revised CDMP, so with the existing rate the plan would be changed.

According to the report, the newly developed debt management plan seeks to restrict losses of DISCOs to 16.27% on average during the current fiscal year.

The government has envisaged the target to recover Fuel Price Adjustment (FPA) charges deferred last summer to fetch Rs20 billion into the kitty against estimates of Rs65 billion made on the eve of the last summer.

The markup saving due to IPPs stock payment will bring Rs11 billion while the GST and other taxes on a collection basis will help recover Rs18 billion in the current fiscal year.

The circular debt is estimated to hover around Rs2,113 billion till the end of FY2023, including the amount parked in the Power Holding Limited (PHL), Rs765 billion and Rs1,248 billion payables to power producers and Rs100 billion to fuel suppliers.

Mini-budget
On the fiscal front, the government shared its plan for unveiling a mini-budget through a presidential ordinance.

The FBR has proposed Flood Levy from 1% to 3%, imposing another levy to deduct 65% to 70% tax from lofty profits earned by the banking sector through exchange rate manipulation and hiking rates of certain withholding taxes.

The IMF has discussed the possibility of providing an adjuster for flood expenditure but asked the government to take the decision on qualitative taxation measures to bring the primary deficit to make it surplus at a level of 0.2% of GDP equivalent to Rs153 billion for the current financial year.

‘Elite class to share burden’
Talking to journalists, State Minister for Finance Aisha Ghaus Pasha said that the cost of power generation was on the higher side while the recovery was less, so the bottom point was crystal clear that the country now could not afford subsidy.

She said the government would not put the burden on common consumers as much as possible but the elite and affluent class would have to contribute by paying the full cost of electricity generation.

She said the Power Division presented its plan to tackle the circular debt. Pakistan and the IMF will continue the technical-level talks in the next couple of days and then afterwards the policy levels will be held to finalise the Memorandum of Financial and Economic Policies (MEFP) document next week, she concluded.
 
MenInG said:
The International Monetary Fund (IMF) on Tuesday expressed concerns that the opposition might create hurdles in the way of implementing tough economic decisions, urging the government to meet all the “requirements” for the completion of the much-delayed programme review.

Nathan Porter, the visiting mission chief of the IMF, raised the question about the implication of the opposition’s role in difficult decisions that Pakistan would have to take to avoid the default.

He expressed these concerns during the opening round of 10-day-long talks, according to the government officials.

Finance Minister Ishaq Dar led the Pakistani delegation.
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Amazing statement..in other words lock em up or no money.
 
the Great Khan said:
Amazing statement..in other words lock em up or no money.
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Yet the same ik signed the last imf agreement when he was in power and then against the imf agreement when he put the fuel subsidy last February.

Wasn't it ik who said he would eat grass rather than go to imf yet he followed the same model as the other 2 parties and increase circular debt and go to the imf

Quote and unquote
"Imran Khan will die. But he will never ask for money."
"We will never take loans like beggars from America or the IMF."
"I would rather commit suicide, than seek a loan."

After coming into power and months of pussyfooting around they ended up going to the imf.
 
mazkhan said:
Yet the same ik signed the last imf agreement when he was in power and then against the imf agreement when he put the fuel subsidy last February.

Wasn't it ik who said he would eat grass rather than go to imf yet he followed the same model as the other 2 parties and increase circular debt and go to the imf

Quote and unquote
"Imran Khan will die. But he will never ask for money."
"We will never take loans like beggars from America or the IMF."
"I would rather commit suicide, than seek a loan."

After coming into power and months of pussyfooting around they ended up going to the imf.
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And not only went to the IMF & took their money, but afterwards reneged on the agreed plan by increasing the subsidies. No wonder IMF is so jittery about the Pakistani opposition now.

IMF should not get into this & let Pakistan default like so many other nations. Pakistan politicians and public need to realize the consequences for decades of living beyond their means and getting into endless circular debt. Not to mention badmouthing the same people who save their axx every couple of years. The world should not be perpetually paying for the policies of a failed economy.
 
IMF will play hardball, especially after the recent Russia bonhomie!
Which makes one wonder, why not schedule the Russia visit after IMF leaves?

Also Dar leading any negotiation reminds one of helping an elderly chacha work an app! Neither do they know how to work it, nor would their ego allow them to accept advice.
 
Prime Minister Shehbaz Sharif on Friday said that the International Monetary Fund (IMF) delegation, which is visiting the country for discussions on the ninth review of a $7 billion loan programme, was giving a “very tough time” to Finance Minister Ishaq Dar and his team.

“Our economic challenge at this moment is unimaginable. The conditions we have to fulfil [to complete the IMF review] are beyond imagination,” he said without elaborating.

However, the country had no choice but to implement the conditions, PM Shehbaz acknowledged. He made the comments while addressing an Apex Committee meeting in Peshawar.

The IMF delegation, headed by Nathan Porter, and the government began the make-or-break discussions on the completion of the ninth review on Tuesday. Pakistan needs to complete the review to stave off default.

The country’s reserves have depleted to a critically low level of $3.09 billion as of Jan 27, which can cover only 18 days of imports, according to Arif Habib Limited. Completing the IMF review would not only lead to a disbursement of $1.12bn but also unlock inflows from friendly countries and other multilateral lenders.

As meetings began, the IMF mission chief sounded adamant on upfront, calibrated and strong measures to bridge the daunting fiscal gap — between Rs2 trillion to Rs2.5tr.

“You don’t have any other option” was the critical message, as members of the mission engaged with the finance and power ministries led by Ishaq Dar and Khurram Das*tgir Khan, respectively, sources close to the meetings told Dawn.

The government has taken a number of measures to complete the IMF review, including lifting an unofficial price cap on the exchange rate, hiking petroleum rates by up to 16 per cent and increasing the LPG price by 30pc.

The two sides would remain focu*sed on technical-level deliberations in the first round, slated to run until Friday (today), then move on to the crucial policy-level negotiations over the next weekend until Feb 9.

https://www.dawn.com/news/1735103/i...finance-minister-team-during-talks-pm-shehbaz
 
Its obvious by now that even with an IMF allocation, medium term debt repayment obligations are nigh on impossible for the Govt! I cannot understand then why strangle the economy by stopping expenditure. Neither are you carrying out your duties as a govt. nor are you repaying debts. Default and sort out this mess with the lenders for once and for all.

Post default borrowing will be nigh on impossible for the immediate future, rupee will tank, importing will be difficult etc..... but wake up, its already happening.

The biggest issue with a default is Shebaz & Cos. political future, it will cause irreparable damage. But does PM sahib intend to hold the country to ransom to save his own burnt backside?

IK is lucky these fools threw him out of office. Couldn't have scripted it better himself.
 
IMF asks to use 50% of budget for debt servicing. It’s a bitter pill to swallow. Don’t know how any country can get through this.
 
wasim-fan said:
IMF asks to use 50% of budget for debt servicing. It’s a bitter pill to swallow. Don’t know how any country can get through this.
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Unfortunately better do it now rather than later when that 50% may creep beyond 60%. The budget share for forces likely won't get curtailed, and as the debt payment in terms of revenue percentage increases it will leave very little space for investements in infrastructure, health, education. Atleast if it is done now, there will be tremendous hardship for next 2-3 years but then the country will start to get into a stronger footing once they start controlling the debt. The other option is an even bigger political disaster in the long term which is to give more land or sovereign assets to China .
 
RajBan said:
Unfortunately better do it now rather than later when that 50% may creep beyond 60%. The budget share for forces likely won't get curtailed, and as the debt payment in terms of revenue percentage increases it will leave very little space for investements in infrastructure, health, education. Atleast if it is done now, there will be tremendous hardship for next 2-3 years but then the country will start to get into a stronger footing once they start controlling the debt. The other option is an even bigger political disaster in the long term which is to give more land or sovereign assets to China .
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The issue for Pakistan is that even the worst hardship wouldn't get them through. Zaidi was spot on when he said that it is a crippled economy. When it grows, it becomes weaker. Dependent on remittances. Dependence on imports. No land reform. Burgeoning population. It's only natural that with such complex problems you will look for messiah or magic bullet. It's not happening. And at it's core. Identity crisis.
 
Where's the all weather friend China? A few billion dollars is a pocket change for China, surely it can step up and provide a credit line. But eventually this problem has to be resolved by Pakistan itself, economic reforms and lid on corruption is the only way forward.
 
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happydavy said:
Where's the all weather friend China? A few billion dollars is a pocket change for China, surely it can step up and provide a credit line.
But eventually this problem has to be resolved by Pakistan itself, economic reforms and lid on corruption is the only way forward.
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I think Pakistan's woes are beyond a few billion $. Chinese/Arabs etc. are smart, they would never gift money to the current lot of thieves.

Pakistani economy is on the verge of collapse.

At this point, it doesn't matter who is governing. Alea iacta est. It would be a miracle, if somehow Pak manage to get out of this one in next 5-10 years cycle.

Pakistani establiment / army doesn't want middle class Pakistani people to have critical thinking, education or prosperity.
 
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IMF has asked Pakistan to declare the assets of government officials of grade 17 and above, as well as those of their families.
 
Cover Drive Six said:
IMF has asked Pakistan to declare the assets of government officials of grade 17 and above, as well as those of their families.
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Lol, good luck with that IMF!

They harassed, threatened, chased and finally murdered Arshad Sharif for trying to make a documentary regarding assets of Pakistani generals. These shameless sickos are dragging Arshad's old mother around random courts in Pakistan for "justice" (who has already lost her other son and husband, both served Pak army). Shame/laanat on Pakistanis as a people (me including).
 
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I am not sure how accurate the above video is as it is an Indian POV, but Sekhar seems to be making a few valid points on the current situation in Pakistan...
 
I watched that video with Atif Mian and Miftah Ismail and they said that Pakistan has to pay $73 billion by 2025
Can Pakistan repay such a big amount by then or will they have to go back to the IMF for another deal?
 
Prime Minister Shehbaz Sharif on Sunday reiterated that the country was facing substantial financial challenges, with the International Monetary Fund (IMF) “combing every book” during the ongoing negotiations over the ninth review of the $7 billion loan programme.

The IMF delegation, headed by Nathan Porter, and the government began the make-or-break discussions last week. Pakistan needs to complete the review to stave off default.

Subsequently, the government had increased liq*u*efied petroleum gas (LPG) price by 30 per cent and finalised a minimum of Rs6 per unit average increase in electricity rates between now and August.

Over the weekend, the premier said the IMF delegation was giving a “very tough time” to Finance Minister Ishaq Dar and his team.
 
Nikhil_cric said:
I watched that video with Atif Mian and Miftah Ismail and they said that Pakistan has to pay $73 billion by 2025
Can Pakistan repay such a big amount by then or will they have to go back to the IMF for another deal?
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IMF loan comes with some prior actions and commitment to making some policy decisions so that the borrowing countries restore economic stability and growth and also reduce poverty. Since unlike other developmental loans or commercial loans, IMF carries policy restrictions so most countries once they are stable want to return IMF loans while raise debt from other sources. To your point, once a country is stable and has enough money to pay off the interest comfortably then there are always borrowers existing. While it is theoretically possible for a country to have no debt ( Luxembourg, Kuwait etc) but it's not necessary. Infact just like in life once you become rich, you end up taking more and more debt at cheaper rates as lenders trust borrowers who have deep pockets, similarly countries with big economy can afford to have higher debt to GDP ratio. So for Pakistan important part is to grow the economy.
 
Nikhil_cric said:
I watched that video with Atif Mian and Miftah Ismail and they said that Pakistan has to pay $73 billion by 2025
Can Pakistan repay such a big amount by then or will they have to go back to the IMF for another deal?
Click to expand...

The debt payments will be re negotiated. But yes, honestly some very very hard decision and sale of assets is on the card. There is no other way.
 
Looks like China screwed Pakistan with CPEC..most posters here were gloating about CPEC but now it is clear the results are contrary to the expectations..
 
wasim-fan said:
The debt payments will be re negotiated. But yes, honestly some very very hard decision and sale of assets is on the card. There is no other way.
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They need to do the following ASAP otherwise a bloody revolution is not at an impossible event-

Tax the upper middle class and rich, atleast 35%

Tax the elite and uber rich to 45%, no escape. This should include all the upper level military officers, businessmen, politicians, corporate executives, doctors, lawyers

Abolish dual citizenship from now onwards, start with all government officials, bureaucrats, army, politicians to ensure that they are accountable for only one country without any escape route.


Tell the rich that they have enough and it's now time for them to chose whether they want a country where they will continue to thrive because of generational aggregation of wealth or they will lose everything when the floodgate opens. I am little surprised why Imran and his party is muted. This is the time when they should be on the street protesting the economic suicide committed by Dar.

P.S.
The other things that they must do is to seal their border with Afghanistan to restrict nuisance elements to come on this side.

Reform gun laws and put army on the street to surrender all guns in every nook and corner even in tribal areas.
 
The International Monetary Fund (IMF) and the Government of Pakistan are at a stalemate over 900 billion rupees fiscal gap, a major stumbling block in striking a staff-level agreement, reported Geo News.
IMF has worked out a larger gap of approximately 900 billion rupees, equivalent to 1 per cent of the gross domestic product (GDP).

IMF is asking to jack up the GST rate by 1 per cent from 17 to 18 percent or impose 17 percent GST on Petroleum, Oil, and Lubricants (POL) products, reported Geo News.

Meanwhile, Pakistan is contesting the fiscal gap in achieving the primary deficit. Pakistani authorities have asked the IMF for incorporating a flow of reduction under the revised Circular Debt Management Plan (CDMP) and reduced the amount of required additional subsidy of 605 billion rupees against the earlier target of 687 billion rupees.

Therefore, the fiscal gap stood in the range of 400 billion to 450 billion rupees.

Moreover, top officials have completely ruled out any possibility of IMF condition about the signing of Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan for reviving the Fund program and said that no such discussions took place with the IMF review mission, reported Geo News.

"Differences still persist over ascertaining the exact fiscal gap between Pakistan and the visiting IMF review mission during the technical levels talks. Once it's finalized with the IMF, then the additional taxation measures will be firmed up, which will be unveiled through the upcoming mini-budget. In view of a lack of reconciliation over the figure of fiscal gap, the technical level talks will continue on Monday and then policy level talks are expected to commence from Tuesday," sources confirmed while talking to a select group of reporters in the background discussions on Saturday.

They said the government agreed in principle with the IMF to abolish electricity and gas tariff subsidies for the export-oriented sector because such kind of dole out was completely unacceptable to the lender.

The exporters' scheme will be revised by bringing major changes to it, said the official, reported Geo News.

The Pakistan authorities conceded that the power sector had so far proved to be a major stumbling block on the way to achieving smooth sailing.

However, the circular debt for the gas sector also remained a problematic area, reported Geo News.

The expenditures overrun will breach the overall budget deficit target of 4.9 per cent of GDP, which is likely to touch 6.5 to 7 per cent for the current fiscal year.

Meanwhile, the government is ready to slap the flood levy on affluent segments as well as on imports, impose a levy at the rate of 41 per cent on windfall profits earned by the banking sector, enhance Federal Excise Duty (FED) rate on cigarettes, sugary drinks from 13 to 17 per cent, enhance withholding tax rates on a property transaction, air travel abroad and others.

The IMF assessed that the FBR would face a shortfall of 130 billion rupees in achieving the target of 7,470 billion rupees, reported Geo News.

It is expected that both sides would strike a staff-level agreement by the conclusion of the talks on February 9. Then the IMF's Executive Board will consider approval of the next tranche probably in March 2023.

NDTV
 
IMF demands reduction of defence budget by US$ 2 billion by Pakistan.
Govt cannot decide on it as army chief is away in the UK. He'll return on 9th Feb.
 
China must change its policies as low-income nations cannot pay: IMF amid Pakistan crisis

International Monetary Fund Managing Director Kristalina Georgieva in an interview on Sunday said China must change its debt policies because low-income countries cannot pay.

The statement comes amid a stalemate between the IMF and Pakistan over 900 billion rupees fiscal gap, a major stumbling block in striking a staff-level agreement.

Pakistan is resisting the fiscal imbalance as a way to cut the primary deficit, despite the IMF's call for a one per cent increase in the GST rate for certain goods.

"What we are working towards is to bring all creditors, the traditional creditors from advanced economies, new creditors like China, Saudi Arabia, India, as well as the private sector, and put them around the table with the debtor countries," the IMF director was quoted as saying by Reuters.

The statement assumes significance as China's finance minister and its central bank governor are set to attend a roundtable with other creditors and some borrowing countries in India this month.

As for Pakistan, it is expected that both sides would strike a staff-level agreement by the conclusion of the talks on February 9. Then the IMF's Executive Board will consider approval of the next tranche, probably in March 2023.

https://www.msn.com/en-in/news/world/china-must-change-its-policies-as-low-income-nations-cannot-pay-imf-amid-pakistan-crisis/ar-AA179DMI?ocid=entnewsntp&pc=U531&cvid=1152dde29ee84fb790c064bcec1ff3f4
 
Govt implements revenue measures from Feb 15 to secure $1.2bn IMF tranche early

• Ends Kissan Package, power subsidy for exporters
• 1pc hike in GST to yield additional Rs70bn in four and a half months

ISLAMABAD: In light of an unexpected relief in tax measures from the International Monetary Fund, the government has decided to take a proactive approach and implement tax and non-tax measures from Feb 15 instead of March 1 — the purported deadline proposed by the global lender — to secure quick release of $1.2 billion tranche.

Ahead of the start of much-delayed talks, the government was expecting that the IMF would ask for approximately Rs400 billion in tax and non-tax measures, but as policy-level talks came to a close both sides agreed on Rs170bn collection from tax and non-tax measures in the next four and a half months.

...
https://www.dawn.com/news/1736694/g...-from-feb-15-to-secure-12bn-imf-tranche-early
 
Pakistan returns draft MEFP to IMF

The Interna*tional Monetary Fund (IMF) and Pakistan resumed their virtual talks on Tuesday as the government responded to the draft of the Memorandum of Economic and Financial Policies (MEFP) shared by the Fund.

Memoranda of Economic and Financial Policies are prepared by the member country. A memorandum describes the policies that a country intends to implement in the context of its request for financial support from the IMF.

“The Fund sent us the draft MEFP. We have shared our comments on it and shared with them,” Finance Secretary Hamed Yaqoob Sheikh told Dawn. “Though email exchange has continued, virtual interaction will start today (Tuesday).”

He said the government of Pakistan was also processing prior actions and commitments with the IMF for “expeditious completion.”

The finance secretary said that the Economic Coordination Committee (ECC) had already approved revisions in electricity and tariffs as well as enhancing funding for the Benazir Income Support Programme (BISP) to adjust for inflation.

“Other approvals are likely to be completed in the cabinet meeting today,” he added.

Pakistan held 10 days of intensive talks with an IMF delegation in Islamabad — from Jan 31 to Feb 9 — but could not reach a final deal.

...
https://www.dawn.com/news/1737249/pakistan-returns-draft-mefp-to-imf
 
Why Pakistan is IMF’s most loyal customer
Running to the global emergency ward 23 times in 75 years is no way to run a country

People often wonder why Pakistan keeps going to the IMF again and again. A whopping number of 23 programs clearly suggests that we are addicted to the Fund’s tough love. In fact, we are the IMF’s most loyal customer. Argentina, with 21 programs, is number two. In contrast, our Midnight twin India has only been to the IMF seven times and never since the landmark Manmohan-Rao reforms of 1991.

Running to the global emergency ward 23 times in 75 years is no way to run a country. This article tries to explain as plainly as possible why Pakistan has never been able to wean itself off the IMF. Buckle up and pour yourself a strong one. It is not a pretty story.

A country typically goes to the IMF if it has run out of foreign exchange reserves. Foreign exchange reserves are used to pay for imports and to pay back money borrowed from abroad, including other countries, multilaterals like the IMF and World Bank, and foreign residents.

...
https://www.thenews.com.pk/print/1041158-why-pakistan-is-imf-s-most-loyal-customer
 
daytrader said:
Why Pakistan is IMF’s most loyal customer
Running to the global emergency ward 23 times in 75 years is no way to run a country

People often wonder why Pakistan keeps going to the IMF again and again. A whopping number of 23 programs clearly suggests that we are addicted to the Fund’s tough love. In fact, we are the IMF’s most loyal customer. Argentina, with 21 programs, is number two. In contrast, our Midnight twin India has only been to the IMF seven times and never since the landmark Manmohan-Rao reforms of 1991.

Running to the global emergency ward 23 times in 75 years is no way to run a country. This article tries to explain as plainly as possible why Pakistan has never been able to wean itself off the IMF. Buckle up and pour yourself a strong one. It is not a pretty story.

A country typically goes to the IMF if it has run out of foreign exchange reserves. Foreign exchange reserves are used to pay for imports and to pay back money borrowed from abroad, including other countries, multilaterals like the IMF and World Bank, and foreign residents.

...
https://www.thenews.com.pk/print/1041158-why-pakistan-is-imf-s-most-loyal-customer
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That’s a very good primer of all the things that has gone wrong in Pakistan.
 
International Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged Pakistan to take necessary steps "to be able to function as a country" and avoid "getting into a dangerous place where its debts need to be restructured”.

She said this while speaking to German broadcaster Deutsche Welle at the Munich Security Conference.

The statement comes days after Pakistan and the global lender failed to reach a staff level agreement within the stipulated time to revive a stalled $6.5 billion bailout package. However, both the sides agreed on a set of measures that can still help clinch the deal to avoid a looming default.

Pakistani authorities had hoped that they would convince the IMF about its good intentions regarding implementation of all outstanding conditions in a gradual manner. But the hopes were dashed during the 10-day visit by the IMF mission, which ended on February 9 without a staff level agreement.

Speaking at the Munich Conference, Georgieva gave more details of the measures that the global lender is expecting the Pakistan's government to ensure.

“I want to stress that we are emphasising two things. Number 1: tax revenues. Those who can, those that are making good money, they need to contribute to the economy,” she said, referring to the IMF's conditions for the revival of the stalled bailout package.

“Secondly, to have a fairer distribution of the pressure by moving subsidies only towards the people who really need it,” the IMF chief added.

She emphasised the need for introducing targeted subsidies, saying, “It should not be like the wealthy benefit from subsidies. It should be the poor who benefit from them".

'The Fund is very clear that we want the poor people of Pakistan to be protected,' she added.

“My heart goes to the people of Pakistan," said Georgieva, acknowledging that Pakistan was devastated by unprecedented floods in 2022 which affected over one-third of its population.

Express Tribune
 
The National Assembly (NA) on Monday passed the Finance (Supplementary) Bill, 2023, aimed to amend certain laws relating to taxes and duties to raise an additional Rs170 billion in the next four and half months to meet the last prior actions agreed upon with the International Monetary Fund (IMF).

The government is in a race against time to implement the tax measures and reach an agreement with the IMF as the country’s reserves have depleted to a critically low level of $2.9bn, which experts believe is enough for only 16 or 17 days of imports. The agreement with the IMF on the completion of the ninth review of a $7bn loan programme would not only lead to a disbursement of $1.2bn but also unlock inflows from friendly countries.

Finance Minister Ishaq Dar introduced the bill in the NA on February 15, and the formal debate started on it after moving a motion by Commerce Minister Syed Naveed Qamar on Feb 17.

In his concluding speech in today’s NA session, Dar said that the bill proposed to impose new taxes of Rs 170bn to minimise the fiscal deficit.

He said that his economic team had a “hectic routine” during the last 10 days and it held talks with the IMF to revive the programme, during which it agreed to take some “tough decisions” for streamlining the deteriorating condition of the economy.

Dar said the new revenue measures would not affect the poor segments of society as most of the new taxes were being imposed on luxury items not used by them. In order to help the poor cope with the rising inflation, he said the government had also proposed a Rs40bn increase in the budget of the Benazir Income Support Programme (BISP).

He said the Senate Standing Committee on Finance had proposed some amendments related to federal excise duty on air tickets to different countries which were adopted.

Dar expressed satisfaction with the performance of the Federal Board of Revenue (FBR) and hoped that the revenue collection target set for the year 2022-23 would be achieved “easily”.

He said the IMF was also concerned over huge losses, such as the power sector facing losses of around Rs1,450bn per year. He said that a total amount of Rs3,000bn is being spent to generate electricity while the government collects only Rs1,550bn.

Dar said that due to power theft, line loss and non-payment of electricity bills, the government was facing almost a Rs1,450bn deficit.

The finance minister said that both houses of parliament had talked about reducing expenses and Prime Minister Shehbaz Sharif would give a comprehensive road map in the coming days for austerity measures.

Dar also criticised the economic policies of the previous government and said that “poor management and lack of fiscal discipline damaged the economy”.

He said that the PTI government did not fulfil commitments with the IMF and “sabotaged the economy” before its ouster. Dar added that it was the state’s obligation to honour the agreement signed with the IMF so the present government was implementing the points agreed upon by the PTI government.

The finance minister said that due to the reforms being taken by the incumbent government, the economy would “first get stabilised and then witness rapid growth in the coming years”.

The minister also thanked the members from both houses of parliament for their recommendations on the bill. He said their feedback has been reviewed and it would be incorporated into the upcoming budget.

Finance bill
Two measures — raising the federal excise duty (FED) on cigarettes and increasing the general sales tax (GST) rate from 17 per cent to 18pc — have already been implemented through Statutory Regulatory Orders. The FBR expects to generate Rs115bn from these two measures.

The finance bill proposes the following:

GST to be increased from 17pc to 18pc; GST on luxury items to increase to 25pc
On first class and business class air tickets, federal excise duty of 20pc of the airfare or Rs50,000, whichever is higher
10pc withholding adjustable advance tax on the bills of wedding halls
Increase in FED on cigarettes, and aerated and sugary drinks
Increase in FED on cement from Rs1.5 to Rs2 per kg
Benazir Income Support Programme budget increased to Rs400bn from Rs360bn
The finance bill also proposes increasing GST from 17 per cent to 25pc on 33 categories of goods covering 860 tariff lines — including high-end mobile phones, imported food, decoration items, and other luxury goods. However, this raise will be notified through another notification.

Through the finance bill, the excise duty on cement has been raised from Rs1.5 to Rs2 per kilogram, a measure estimated to fetch another Rs6bn.

The excise duty on carbonated/aerated drinks has been raised to 20pc from 13pc to raise an additional Rs10bn for the government.

A new excise tax of 10pc was proposed on non-aerated drinks like juices — mango, orange, etc. — to raise an additional tax of Rs4bn.

The increase in excise duty on business-, first- and club-class air tickets will raise an additional Rs10bn for the government. A tax rate of 20pc (or Rs50,000, whichever is higher) has been proposed on the value of air tickets.

The government has also proposed a 10pc withholding tax on functions and gatherings held in marriage halls, marquees, hotels, restaurants, commercial lawns, clubs, community places, or other places. The FBR expects to raise Rs1bn to Rs2bn from this tax.

These measures proposed through the finance bill are in addition to earlier steps agreed upon with the IMF, including increasing electricity and gas rates and allowing a free-floating exchange rate.

To offset the inflationary impact of the budget, the government proposed that handouts under the BISP welfare scheme be increased to a total of Rs400bn from Rs360bn.

The IMF has given a deadline of March 1 for the implementation of all these measures.

DAWN
 
Reacting to the proposed finance bill aimed at raising the general sales tax (GST) from 17% to 18%, the Chain stores Association of Pakistan (CAP) has announced its resistance to International Monetary Fund (IMF) pressure, stating that the new taxation measures are destructive and will add to the misery of traders already coping with serious financial crisis.

CAP Chairman Rana Tariq Mehboob, observed that the new taxation measures will jolt the very basis of trade and industry and will clamp down on the purchasing power of consumers. This will ultimately hit the manufacturing sector very hard.

“It will be better if the government takes measures to expand the tax net instead of introducing new taxes for the already taxed segments of society,” Mehboob said while talking to the media on Monday.

Explaining that the price of petroleum had already smashed the middle and lower classes, he said, “It has become tradition for the government to axe its handful of tax-payers over and over instead of expanding its tax net.”

“Only tier-one retailers are paying taxes – this has robbed the formal sector of competitiveness and a level-playing field,” said Mehboob.

“Under the domino effect of dollarisation, the skyrocketing inflation, which is already in the midst of a decade-high level, along with the unprecedented rupee depreciation, high energy tariffs, escalating mark-up rate, rising commodity prices, fluctuating exchange-rate and balance-of-payment crisis, will lead to a further hike in headline inflation, taking a toll on the local economy,” he warned.

Due to serious imbalances, Pakistan cannot afford to roll out monetary and fiscal policies to achieve the economic growth rate of over 4% it had predicted earlier for FY 2023-24.

The energy rates and the effect of reduced market times added on to their miseries, said Mehboob, demanding the government to come up with long-term sustainable economic policies.

Commenting on the levy collected on the point sales, he said nothing was being returned as had been pledged by the government. Mehboob proposed to stop charging consumers if the return was not assured and demanded the ease of raw material imports.

Published in The Express Tribune, February 21st, 2023.
 
Impasse in talks with IMF on debt surcharge
Both sides agree to continue deliberations

Pakistan and the International Monetary Fund (IMF) on Wednesday failed to break impasse on a new contentious issue of permanently imposing a Rs3.82 per unit debt surcharge to recover Rs284 billion more from electricity consumers.

Against the government’s decision to impose the new surcharge for eight months (March-October 2023), the IMF has asked the government to keep the levy as a permanent fixture in electricity bills until the government settles the Rs800 billion circular debt parked in a company.

Meanwhile, confusion prevailed on Wednesday when the finance ministry took the position different from what the Power Division had communicated to the IMF a day earlier.

This once again underscored lack of coordination among key government departments, which is contributing towards an inordinate delay in reaching a staff-level agreement with the IMF.

A meeting between Finance Minister Ishaq Dar and the IMF Mission Chief Nathan Porter ended with a note that the two sides would meet again to sort out the issue, according to officials privy to these discussions.

Dar is set to leave for Uzbekistan on Thursday (today) on a two-day official visit. During the meeting, both the sides also discussed the issue of $11 billion external financing gap, which the IMF had projected for the current fiscal year.

Pakistan is confident that the gap will be less than $10 billion and that it can bridge it by securing fresh commercial loans from Gulf countries. The IMF is already in touch with regional countries about their plans to give fresh loans to Pakistan, including rollovers.

The sources said that the finance minister urged the IMF to announce the staff-level agreement since the country had met more than 90% of the conditions. But the IMF termed Rs3.82 per unit debt surcharge as “critical” for the resolution of the power sector circular debt, which will still climb to Rs2.4 trillion despite massive increase in the power tariffs.

The 10-day IMF staff-level visit ended on February 9 and despite taking two more weeks both sides have yet to end their differences on major policy matters.

The debt surcharge issue has hampered the finalisation of the staff-level agreement, as the IMF is not inclined to accept the government’s plan to impose the surcharge only for eight months. There is already 43 paisa per unit surcharge, while the IMF is asking for Rs3.39 per unit more to recover a total Rs284 billion.

...
https://tribune.com.pk/story/2402794/impasse-in-talks-with-imf-on-debt-surcharge
 
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">AlhamdoLilah!<br><br>Funds $ 700 million received today by State Bank of Pakistan from China Development Bank. <a href="https://t.co/7eLwWkSFgO">https://t.co/7eLwWkSFgO</a></p>— Ishaq Dar (@MIshaqDar50) <a href="https://twitter.com/MIshaqDar50/status/1629149285529919495?ref_src=twsrc%5Etfw">February 24, 2023</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
The Finance Division on Saturday denied the government issuing instructions to stop pension and salary payments, deeming reports to the contrary “completely false”.

The clarification comes after The News International reported that the Accountant General of Pakistan Revenue (AGPR) had been told by the finance ministry to “stop clearing all federal ministries and attached department’s bills until further orders”.

“Even the clearance of salary bills has also been stopped,” claimed the report, which quoted “top official sources” as saying that “operational cost-related releases faced difficulties mainly because of lingering financial difficulties being faced by the country.”

However, a press release — a copy of which is available with Dawn. com — issued from the Finance Division today rejected the story, saying: “There are rumours floating around that the government has instructed to stop payment of pay, pension, etc. This is completely false as no such instructions have been given by Finance Division, which is the concerned federal ministry.”
 
Pakistan's government has agreed to increase the policy interest rate which stands at 17 per cent by two per cent or 200 basis points to meet another condition set by the International Monetary Fund (IMF), The Express Tribune reported.

With the new decision, Pakistan has accepted another pre-condition of the IMF for the release of USD 1.1 billion in critical funding, a part of the USD 6.5 billion bailout package, the report said, adding that Pakistan has announced the increase in interest rate based on rates the government set in the auction to raise domestic debt.

The decision by Pakistan authorities will push the interest rate to 19 per cent, just below the previous record of 19.5 per cent set in October 1996, The Express Tribune reported.

Sources in Pakistan's Ministry of Finance said that a technical-level discussion had virtually taken place between Islamabad and the IMF review mission.

The sources revealed that there was an expectation that Pakistan will increase the interest rate by two per cent, according to The Express Tribune report. According to sources, the discussions between the Pakistan government and IMF officials were in the final stage on some issues of the power sector.

Earlier this month, the Pakistan government and the IMF staff concluded the ninth review of the USD 6.5 billion bailout package without a staff-level agreement. The Pakistani government had hoped that they would be able to convince the IMF about implementing the conditions in a gradual manner.

However, Islamabad's hopes were dashed during the IMF mission's 10-day visit to Pakistan.

Amid an unprecedented economic crisis in the country, Pakistan Prime Minister Shehbaz Sharif instructed the Ministry of Foreign Affairs to cut the number of foreign missions as part of austerity measures, reported Geo News.

Prime Minister Shehbaz Sharif announced the decision on February 22.

"The prime minister is pleased to direct that a well-considered proposal/ plan in this respect may please be submitted to this office within two weeks positively," a directive issued by the PM Office reads.

Shehbaz has issued instructions to the Ministry of Foreign Affairs to slash down a number of foreign missions abroad and reduce their offices, staff, and other measures to cut down expenditures by 15 per cent, as per the Geo News report.

As per the news report, the official communication titled "Rationalisation of Foreign Mission Abroad" states that in view of the ongoing economic constraints and the consequent need for fiscal consolidation and control of external deficit, the prime minister was pleased to constitute a National Austerity Committee (NAC).

NDTV
 
With unprecedented policy doses within 24 hours, Pakistan on Thursday completed all the prior actions needed for staff-level agreement (SLA) with the International Monetary Fund (IMF) to avert sovereign default and secure long-delayed $1.2bn disbursement.

Sources told Dawn that policy actions stood completed after the exchange rate was allowed to move freely with a massive Rs25 per dollar depreciation in two days, an unusual 300-basis-point surge in State Bank’s policy, and the government’s announcement of continuing with an almost 10pc increase in power rates on a permanent basis through a special surcharge.

These sources said the two sides were now jointly working to finalise the text of the Memorandum of Economic and Financial Policy (MEFP) and targets for the programme implementation that could be presented to the IMF’s executive board for approval.

This would involve the programme monitoring tools like performance criteria, indicative targets and other similar reporting benchmarks for agreed upon macroeconomic framework.

DAWN
 
The government will resume virtual talks with the International Monetary Fund (IMF) on Monday to finalise revenue and expenditure figures for the next four months, a senior government official told Dawn on Saturday.

The IMF team, led by its Pakistan mission chief Nathan Porter, held talks with finance ministry officials for a couple of days, followed by a last meeting with tax officials on Friday to review the impact of prior actions in terms of revenue generation and their impact on bridging fiscal gaps.

DAWN
 
No date given for staff-level agreement with IMF
SBP gov says CAD will close at $7b this year – $1.2b less than IMF forecast

Central bank Governor Jameel Ahmad said on Wednesday that staff-level agreement (SLA) with the International Monetary Fund (IMF) was “close to finalisation” but shied away from giving a date amid his forecast of a reduction in non-debt creating inflows.

The head of the State Bank of Pakistan (SBP) made a policy statement about the external sector outlook, inflation and economic growth during a meeting of the Senate Standing Committee on Finance.

His assessment painted a bleak external sector picture, indicating that the combined inflows, on account of exports and foreign remittances, will be $14 billion to $15 billion less than the budgetary estimates made by the federal government.

“The SLA is close to finalisation and it is now a matter of time when it will be announced,” said the governor. The current account deficit (CAD) projection that he gave for this fiscal year, however, was still out of line with the IMF’s forecast.

“We will be closing this fiscal year at a CAD of around $7 billion,” said Ahmad – a figure that is $1.2 billion less than the IMF’s forecast but in line with Finance Minister Ishaq Dar’s assessment.

The CAD quantum has a direct bearing on the external financing gap, which Pakistan sees at $5 billion but the IMF has projected at $7 billion, according to the finance minister.

...
https://tribune.com.pk/story/2405145/no-date-given-for-staff-level-agreement-with-imf
 
STAFF LEVEL AGREEMENT WITH IMF EXPECTED IN NEXT TWO DAYS: DAR

Finance Minister Ishaq Dar has said that the staff level agreement with the IMF is expected within next two days, ARY News reported on Thursday.

Addressing a seminar in Islamabad, federal finance minister said that incumbent government has inherited the economic crisis and taking steps for economic revival of the country.

He lauded the role of the World Bank in Pakistan’s economy adding that the Asian Development Bank is key development partner of the country.

“We want to stabilize the national economy in new budget and intend to scale down challenges for general public in the next budget,” he vowed. Federal Minister promised to overcome current economic problems soon.

He said that Pakistan was among the world’s emerging economies in 2018 and a hub for international investment. “Imran Khan drastically enhanced Pakistan’s borrowing by 24,000 billion. His policies paved foundations for the price hike,” he claimed. “Pakistan’s economic difficulties have increased since 2018,” economic minister said.

“The coalition government inherited worst economy. Imran Khan deviated from the IMF programme and hurt confidence of development institutions,” he further said.

Ishaq Dar promised strict implementation of the government’s austerity drive. “All cabinet members have stopped use of big jeeps, federal government will curtail expenditure by 15 percent,” he said. “Official delegations won’t stay in five star hotels. Government officials and ministers will travel in economy class,” finance minister said.

“Pakistan’s economy facing baseless propaganda, there is none of truth about this propaganda of bankruptcy,” Ishaq Dar said.

ARY
 
Finance Minister Ishaq Dar on Thursday snubbed the demand for abandoning long-range nuclear missiles and said that nobody has any right to tell Pakistan what range of missiles it can have, also pointing out the "uncustomary" attitude of the International Monetary Fund (IMF).

The minister’s highly unusual statement came amid Pakistan’s renewed efforts to mend ties with China, which has lately saved Islamabad from the default by refinancing two commercial loans. But Islamabad is still waiting for the rollover of a $2 billion Chinese deposit that is maturing on March 23 (Pakistan Day).

“Nobody has any right to tell Pakistan what range of missiles it can have and what nuclear weapons it can have. We have to have our own deterrence,” said Dar while speaking during a special Senate session in front of ambassadors of many nations.

It is for the first time that the finance minister has brought the issue of the range of nuclear missiles into the public sphere. In private conversations, some Pakistani authorities had said that there was a longstanding demand by a Western country to abandon the long-range nuclear missile programme.

Shaheen-III is Pakistan’s long-range nuclear missile having the capability to take nuclear warheads to 2,750 kilometer distance, covering the whole of India and parts of the Middle East.

Read: 'Safe, foolproof and free': PMO dismisses nuclear rumours

Dar assured that “nobody is going to compromise anything on the nuclear or missile programme of Pakistan — no way”. His categorical statement may end the debate whether Pakistan will eventually compromise on its nuclear arsenals in return for the IMF programme.

Hours after Ishaq Dar’ statement, the Prime Minister’s Office also issued a statement to clear the air about the nuclear programme and its safety.

“Pakistan's nuclear and missile programme is a national asset, which is jealously guarded by the State,” said the PM’s Office. The entire programme is totally secure, foolproof, and under no stress or pressure whatsoever, it added.

The nuclear and missile programme continues to fully serve the purpose for which this capability was developed, said the PM’s Office.

The PM’s Office stated that, in the wake of all the recent statements, press releases, and queries, various assertions regarding Pakistan's nuclear and missile programme were being circulated on social and print media, wherein even a traditional routine visit of DG IAEA Rafael Mariano Grossi for peaceful nuclear programme was portrayed in a negative light.

Dar also spoke about the delay in reaching a staff-level deal with the IMF, saying the delay was “not on the part of the government”.

“It looks like each time the review is a new programme, which is very uncustomary with the IMF,” said Dar.

The still-incomplete talks for the ninth review began on January 31, which had to be finished on February 9 but are yet to conclude.

“It has been an extensive engagement, unusual, too lengthy, too long, and too demanding but we have completed everything,” said Dar while airing his frustration regarding the IMF.

He said the PTI government’s signed agreement of 2019 was different from the past under which the SBP law was amended by "this very parliament, after which the monetary policy has become too independent, in my opinion".

Read more: IMF not being fair to Pakistan, says Foreign Minister Bilawal

While speaking about the remaining hurdles, Dar said that, at the time of the previous review, certain friendly countries had made commitments to bilaterally support Pakistan. “The IMF is now asking that they should actually complete and materialise those commitments. That’s the only delay,” the finance minister told the Senate.

Pakistan needs $6 billion in new loans to bridge the financing gap, but Saudi Arabia, the United Arab Emirates, and Qatar have not yet given these loans despite repeated requests by Pakistan.

China bon ami

Sources told The Express Tribune that Pakistan is making renewed efforts to normalise its relations with China. The foreign secretary has gone on a visit to Beijing while the Chief of Army Staff is also expected to travel to China next week, they added.

Before departing to Beijing, the foreign secretary met with Finance Minister Ishaq Dar at the Q-block.

China has recently agreed to refinance the $2 billion in foreign commercial loans and has already transferred $1.2 billion in the central bank’s accounts.

Finance Minister Ishaq Dar tweeted on Thursday that the paperwork for another $500 million Chinese financing as part of the $2 billion was completed and the money will be transferred soon. The Chinese injection has helped keep the official foreign exchange reserves at $4.3 billion—although still critically low but sufficient to avoid default.

However, sources said that China has not yet rolled over the $2 billion SAFE deposit, which matured on March 23. The $2 billion loan by China’s State Administration of Foreign Exchange (SAFE) has been rolled over every year as the country lacked the capacity to return the loan.

Prime Minister Shehbaz Sharif has formally requested the Chinese government to roll over both the maturing loans, according to officials. These loans are taken for budget support, building foreign exchange reserves and project financing.

Beijing had given a commitment to the IMF in 2019 to rollover its debt until the Fund programme expires.

Diplomatic sources said that there were some procedural delays and China will soon rollover the $2 billion debt.

China takes pride in financially helping Pakistan without attaching strings like the IMF and the United States.

Also read: Pakistan government plods towards IMF deal

However, Pakistan has not been able to meet its commitments given to Beijing, particularly on payment of the $1.5 billion outstanding dues of the Chinese Independent Power Producers (IPPs). Special Assistant to the PM, Syed Tariq Fatmi, wrote to Ahsan Iqbal on Monday that non-payments of $1.5 billion Chinese dues were causing "huge concerns", which Pakistan urgently needs to address.

He further wrote that Chinese power plants at Hubco, Sahiwal, and Port Qasim were facing currency exchange restrictions and there were still gaps between the Revolving Fund raised by the Pakistani side and the Revolving Account Agreement signed between the two nations.

During the visit of former Prime Minister Imran Khan Pakistan and PM Shehbaz Sharif, Pakistan had sought rollover of the SAFE deposits. In February last year, Pakistan had requested a total $21 billion lifeline that included a $10.7 billion rollover of both commercial and SAFE deposits.

Pakistan had also requested to increase the size of the currency swap facility from $4.5 billion to $10 billion—an additional borrowing of $5.5 billion which the Chinese authorities did not approve at that time.

The Currency Swap Agreement is a Chinese trade finance facility that Pakistan has been using since 2011 to repay foreign debt and keep its gross foreign currency reserves at comfortable levels instead for trade-related purposes.

The benefit of this arrangement is that the additional Chinese loan will not reflect on the book of the federal government and will not be treated as part of Pakistan’s external public debt.
 
The chances of finalising the ninth review of the troubled $6.5 billion Extended Fund Facility (EFF) from the International Monetary Fund (IMF) soon got bleak after the global lender on Monday raised questions over the government’s new fuel subsidy scheme.

The development came as the government decided to dole out subsidies worth billions of rupees on petrol as well as Rs73 billion on wheat flour that could potentially lay landmines in the path of the Fund’s programme.

Instead of putting its house in order, the government announced Rs50 per liter subsidy for owners of up to 800cc cars and motorcyclists while Khyber-Pakhtunkhwa and Punjab will give Rs73 billion in wheat flour subsidy cumulatively.

Sources in the finance ministry said that the global lender has inquired about the source of financing of the Prime Minister’s petrol scheme. The IMF also asked about the mechanism in implementing the new subsidy programme, they added.

In her reaction, Esther Perez, the Resident Representative of the IMF, told The Express Tribune that the Pakistani “authorities did not consult with the IMF staff ahead of announcing their recent fuel subsidy proposal”.

She added that the IMF staff was seeking “greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities”.

“As a general matter, the IMF sees strengthening support for those eligible for social assistance through the unconditional Kafalat cash transfer scheme (BISP) as the most direct way to help the neediest in Pakistan,” said Esther.

The federal government plans to collect Rs50 per liter extra from car owners of above 800cc category and give it to car owners of below 800cc and motorcyclists.

Prime Minister Shehbaz Sharif has the audacity to waive taxes of the richest commercial banks last month and also withdrew Rs3,000 per month tax on traders in September last year but wants to penalise middle-income group owning 1,000cc cars to fund his political scheme.

The IMF raised queries a day after the Prime Minister’s Office announced to give Rs50 per liter subsidy to the 1.3 million owners of 800cc cars and over 20 million motorcyclists and rickshaw owners.

The move may jeopardise the IMF programme, if the government’s explanation remained short of the Fund’s expectations. The chances of an early IMF deal are already thin due to many political moves made by the government and its inability to raise $6 billion additional loans.

While addressing a news conference on Monday, Minister of State for Petroleum Musadik Malik said that the government will charge Rs100 more for petrol from the affluent so that relief could be provided to the low-income segments in fuel tariff.

The government considers an owner of 1,000cc car “affluent” but it does not have the guts to slap taxes on the richest landlords and retailers.

While talking to The Express Tribune, Malik said that the owners of above 800cc cars will pay a higher price of Rs50 over and above the normal OGRA-determined petroleum products prices, which will be utilised to reduce the rate for the low-income consumers.

The per liter petrol price is Rs273, which will be increased to Rs323 at the current rates for the car owners of using above 800cc to help the PML-N and its allied parties to win the next general elections.

Due to fears that PTI Chairman Imran Khan will clean sweep, the government is dragging its feet from holding the elections and has now placed its bets on the middle- and upper-middle income groups to lure votes from the lower-middle income groups through such schemes.

In the words of a senior PML-N party leader, the cross-fuel subsidy is a double-edged sword for the government.

The state minister explained that an escrow account will be opened with the National Bank of Pakistan and the dealers claims of subsidised fuel will be settled on a daily basis.

He added that the beneficiaries will be registered against the national identity card numbers who will receive a one-time-password to claim the cheaper fuel.

A motorcyclist will receive a maximum 21 liter per month cheaper fuel with a daily cap of 3 liter while an 800cc car owner will get a maximum 30 liter per month of petrol, said Malik.

The petrol subsidy programme would be implemented within the next six weeks without any provision of subsidies being paid from the budget, said Malik.

Wheat flour subsidy

On the instructions of the Prime Minister, the two provinces have also rolled out a free wheat flour scheme in Khyber-Pakhtunkhwa and Punjab. The sources said that the cumulative cost of the subsidy will be Rs73 billion per month in the two provinces.

An amount of Rs53 billion will be utilised in Punjab and another Rs19 billion will be needed in Khyber-Pakhtunkhwa -- a province that is already in the red and cannot afford to give subsidies.

“The Rs73 billion spending might jeopardise the recently agreed fiscal framework with the IMF, which requires Rs559 billion provincial cash surpluses,” said the Finance Ministry sources.

On the basis of the Rs559 billion cash surplus, Rs465 billion or 0.5% primary budget deficit target had been agreed upon with the IMF just last month.

The sources said that K-P had informed the prime minister that it did not have the entire Rs19 billion funds to finance the free wheat flour scheme. The plan is to give free wheat flour to 5.7 million families in the province.

An official of the Punjab Finance Department said that the provincial government will honour its commitment given to the IMF. He said that although the maximum estimated cost is Rs53 billion, it may not go that high. He said currently the provincial government bears about Rs30 billion a month wheat flour subsidy.

Recently, the untargeted subsidy has ended by increasing the released millers prices to the level of support price to end the general subsidy, he added.

The provincial government is paying Rs90 billion annual mark-up on the Rs575 billion debt taken for wheat operations in Punjab, which has become unsustainable. He said that the general wheat subsidy was financially unsustainable and will be removed and target subsidy will continue henceforth

About 15.8 million households will benefit from the free wheat flour scheme.
 
IMF says Pakistan needs to overcome trust deficit
Global lender wants country to initiate economic reforms

The International Monetary Fund (IMF) has acknowledged that Pakistan’s economy faced multiple challenges, including high inflation and interest rates as well as low foreign exchange reserves.

Julie Kozack, the director for strategic communications of IMF, underlined this at a virtual news briefing the other day where she also referred to the talks the IMF had been holding with Pakistan. “And of course, this is all coming on the back of devastating floods.”

She added that the global lender wanted the Pakistan government to initiate economic reforms that would greatly help overcome trust deficit between the two sides.

She said it was important to get assurances from Pakistan’s external partners first before the renewal of the package deal.

“Discussions are ongoing between the IMF staff and the Pakistani authorities towards a staff-level agreement on policies to complete the ninth review of Pakistan’s Extended Fund Facility. Timely financial assistance from external partners will be critical in supporting the authorities’ policy efforts and ensuring the successful completion of the review,” she added.

...
https://tribune.com.pk/story/2408253/imf-says-pakistan-needs-to-overcome-trust-deficit
 
Currency dealers offer $24b in loans to govt
Believe financing will help country get rid of IMF programme

Currency dealers in open market have offered loans of $24 billion to the government for the next two years to help it stay away from the International Monetary Fund (IMF) programme, which has badly hit Pakistan’s economy.

Talking to The Express Tribune, Exchange Companies Association of Pakistan (ECAP) President Malik Bostan said, “We have offered $1 billion a month in financing to the government for the next two years to get rid of the IMF.”

The government must pass an order to allow exchange companies to borrow US dollars directly from overseas Pakistanis, foreign firms and global exchange companies, he emphasised.

The loans will be free of cost and can be rolled over, if required. “We are in contact with millions of expatriate Pakistanis as they are our clients. They are ready to lend $1 billion a month to us (exchange companies) over the next 24 months, in addition to the usual inflows received by exchange companies.”

Bostan, along with other office-bearers of the association, floated the proposal in a meeting with Senate Standing Committee on Finance Chairman Saleem Mandviwala in Islamabad.

Central bank officers and other high officials were present in the huddle.

“Exchange companies are already supplying $300-400 million a month, totalling $4 billion a year, to the inter-bank market,” he revealed, adding that the IMF had continued to come up with new conditions one after another, making it tough for Pakistan to give a push to its economy.

Express Tribune
 
Riyadh signals readiness to provide more credit
Sources said IMF wanted $3b to be arranged from a combination of bilateral and commercial loans

Pakistan claimed on Wednesday that it received an indication from Saudi Arabia for additional loans that may help to break gridlock with the International Monetary Fund (IMF) and said that it was not planning to prematurely quit the $6.5 billion programme.

“We have received an indication from Saudi Arabia about getting something,” Dr Aisha Pasha, the Minister of State for Finance, said after attending a meeting of a parliamentary committee, without explaining the loan amount.

She also informed the Senate Standing Committee on Finance that some progress was made a day earlier on a friendly country deposit, saying, “we will soon reach the stage to sign the Staff-Level Agreement with the IMF”.

The IMF has asked Pakistan to arrange $6 billion in additional loans and at least half of those must be materialised before the board meeting. The funds are needed to avoid sovereign default and also increasing the foreign exchange reserves to a level sufficient to back 1.7 months of imports.

Pakistan had told the IMF that it would get $2 billion in additional loans from Saudi Arabia and $1 billion from the UAE to meet the additional financing requirements.

...
https://tribune.com.pk/story/2408929/riyadh-signals-readiness-to-provide-more-credit
 
More paid holidays for these crooks

*********
Dar, team to visit US to attend IMF, WB meetings

Pakistan’s high-powered delegation, led by Minister for Finance Ishaq Dar, is scheduled to visit Washington, DC, for attending the upcoming Annual Spring Meeting of the Breton Wood Institutions (BWIs), known as the International Monetary Fund (IMF) and World Bank, from April 10 to 16.

The finance minister, along with an official delegation comprising the Finance and Economic Affairs division secretaries and the State Bank of Pakistan (SBP) governor, might present fresh proposals before the IMF and World Bank for providing dollar inflows.

Pakistan and the IMF would also discuss the possibility of combining the remaining 10th and 11th reviews under the $6.5 billion Extended Fund Facility (EFF) programme in case the pending 9th Review is completed.

The IMF programme, under the EFF, is going to expire on June 30, 2023, and under the set guidelines, the programme cannot be extended beyond the deadline.

...
https://www.thenews.com.pk/print/1056691-dar-his-team-to-visit-us-to-woo-imf
 
Additional deposits of $2bn: Saudi assurance received, IMF tells Pakistan
Pakistan is now waiting for verification from the UAE for a staff-level agreement with the IMF

With the possibility of getting confirmation from the Kingdom of Saudi Arabia on $2 billion additional deposits, Pakistan is now anxiously waiting for securing verification from the UAE on an additional $1 billion deposit for moving towards a staff-level agreement with the International Monetary Fund (IMF).

Top official sources confirmed to The News on Wednesday that the IMF had conveyed to Pakistani authorities that they had secured confirmation on the provision of $2 billion in additional deposits from the Kingdom of Saudi Arabia (KSA) and the Fund staff seemed largely satisfied with the latest confirmation.

Now the KSA high-ups are all set to make a public announcement, probably during the upcoming visit of Prime Minister Shehbaz Sharif to the Kingdom.

The KSA ambassador in Pakistan had also hinted recently during an interview with a web-based newspaper that his country had always supported Pakistan in critical situations and good news would be shared soon, InshaAllah.

“Now all eyes are focused on the UAE for getting confirmation on another $1 billion deposit from them, which may pave the way for striking the staff-level agreement (SLA) with the IMF,” added the sources.

...
https://www.thenews.com.pk/print/1057669-green-signal-about-2bn-deposit-received-from-ksa
 
Dar pulls out of WB-IMF spring meetings
Cites deepening political uncertainty, developing judicial crisis in country as reasons

In a major development, Finance Minister Ishaq Dar has cancelled his visit to the United States where he was scheduled to meet the International Monetary Fund management for the removal of bottlenecks in the way of the staff-level agreement regarding the revival of the stalled bailout package.

Highly placed sources told The Express Tribune that Dar would not attend the spring meetings of the World Bank-IMF that were taking place from April 10 to 16 in Washington. Dar, who is also leader of the house in Senate, was planning to land in Washington on Sunday.

“I am not going due to the domestic state of affairs,” the finance minister confirmed to The Express Tribune on Thursday.

The deepening political uncertainty and developing judicial crisis were said to be the reasons behind the cancellation of the trip to Washington. Dar had a plan to address the financial and political worlds’ concerns regarding the continuity of the government, future economic plans and bridging the once again trust deficit with the multilateral lenders.

...
https://tribune.com.pk/story/2410418/dar-pulls-out-of-wb-imf-spring-meetings
 
PAKISTAN LIKELY TO GET UAE ‘ASSURANCE’ FOR $1 BILLION THIS WEEK

Good news for cash-strapped Pakistan, as the United Arab Emirates (UAE) is likely to give written assurance to Islamabad for external financing of $1 billion this week, ARY News reported, quoting sources.

Islamabad has been negotiating with the IMF since the end of January for the release of $1.1 billion from a $6.5 billion bailout package agreed upon in 2019.

The International Monetary Fund (IMF) had demanded of the Pakistani government to get a written guarantee from the friendly countries for the deposit to unlock the stalled loan programme.

The development follows after Finance Minister Ishaq Dar specially requested UAE authorities for assurance, the source said.

They further say the finance secretary will brief the IMF officials during a meeting with them in Washington.

On April 6, it was reported that the International Monetary Fund (IMF) confirmed that it has received confirmation from Saudi Arabia on $2 billion in additional deposits to Pakistan.

They further said that the Saudi authorities are all set to make a public announcement, probably during the upcoming visit of Prime Minister Shehbaz Sharif to the kingdom.

ARY
 
daytrader said:
PAKISTAN LIKELY TO GET UAE ‘ASSURANCE’ FOR $1 BILLION THIS WEEK

Good news for cash-strapped Pakistan, as the United Arab Emirates (UAE) is likely to give written assurance to Islamabad for external financing of $1 billion this week, ARY News reported, quoting sources.

Islamabad has been negotiating with the IMF since the end of January for the release of $1.1 billion from a $6.5 billion bailout package agreed upon in 2019.

The International Monetary Fund (IMF) had demanded of the Pakistani government to get a written guarantee from the friendly countries for the deposit to unlock the stalled loan programme.

The development follows after Finance Minister Ishaq Dar specially requested UAE authorities for assurance, the source said.

They further say the finance secretary will brief the IMF officials during a meeting with them in Washington.

On April 6, it was reported that the International Monetary Fund (IMF) confirmed that it has received confirmation from Saudi Arabia on $2 billion in additional deposits to Pakistan.

They further said that the Saudi authorities are all set to make a public announcement, probably during the upcoming visit of Prime Minister Shehbaz Sharif to the kingdom.

ARY
Click to expand...


How long can the economy sustain with just 1bn$..they need to undertake structural reforms and reduce corruption
 
IMF puts a damper on early deal hopes
Lender says it awaits ‘necessary financing assurances’ to conclude talks

The International Monetary Fund (IMF) on Saturday said that it was still waiting for the “necessary financing assurances” for the successful conclusion of the review talks -- dampening the expectations for a deal until Pakistan arranges the remaining $3 billion.

In an early morning statement, Nathan Porter, IMF Mission Chief to Pakistan, said that the IMF “looks forward to obtaining the necessary financing assurances as soon as possible to pave the way for the successful completion of the 9th EFF (Extended Fund Facility) review”.

Highly-placed sources told The Express Tribune that the IMF was seeking confirmation for the total $6 billion loans that Pakistan urgently needs to bridge the external financing gap. They said that the government was trying hard to secure commitments for the rest of the $3 billion by next week.

Four days ago, Finance Minister Ishaq Dar had requested the IMF to show some flexibility and strike a staff-level deal which, according to him, can pave the way for arranging the rest of the loans. The IMF had identified the $6 billion hole in Pakistan’s external financing requirement that it asked to be bridged before the matter was taken to the IMF’s board for approval of the next loan tranche.

Pakistan may take some time to arrange the rest of the loans. The government has mentioned the loans from foreign commercial banks as one of the sources to bridge the gap.

But the finance ministry officials said that it will take four to six weeks in negotiations till a stage is reached for the foreign commercial loans to be disbursed. They added if the foreign commercial banks just give an assurance to the IMF, it will be sufficient to strike a deal.

However, the foreign banks are reluctant to extend any fresh financing due to the junk credit rating of Pakistan.

The government had also placed bets on the $450 million project proceeds from the Geneva pledges and expected to receive over half a billion dollars from the outsourcing of the three international airports -- the two avenues that Pakistan may not tap immediately.

On Friday, Finance Minister Ishaq Dar had announced that the United Arab Emirates had given an assurance to the IMF for a $1 billion loan to Islamabad. Saudi Arabia had already made assurances for a $2 billion loan, according to Minister of State for Finance Dr Aisha Pasha.

...
https://tribune.com.pk/story/2412187/imf-puts-a-damper-on-early-deal-hopes
 
daytrader said:
IMF puts a damper on early deal hopes
Lender says it awaits ‘necessary financing assurances’ to conclude talks

The International Monetary Fund (IMF) on Saturday said that it was still waiting for the “necessary financing assurances” for the successful conclusion of the review talks -- dampening the expectations for a deal until Pakistan arranges the remaining $3 billion.

In an early morning statement, Nathan Porter, IMF Mission Chief to Pakistan, said that the IMF “looks forward to obtaining the necessary financing assurances as soon as possible to pave the way for the successful completion of the 9th EFF (Extended Fund Facility) review”.

Highly-placed sources told The Express Tribune that the IMF was seeking confirmation for the total $6 billion loans that Pakistan urgently needs to bridge the external financing gap. They said that the government was trying hard to secure commitments for the rest of the $3 billion by next week.

Four days ago, Finance Minister Ishaq Dar had requested the IMF to show some flexibility and strike a staff-level deal which, according to him, can pave the way for arranging the rest of the loans. The IMF had identified the $6 billion hole in Pakistan’s external financing requirement that it asked to be bridged before the matter was taken to the IMF’s board for approval of the next loan tranche.

Pakistan may take some time to arrange the rest of the loans. The government has mentioned the loans from foreign commercial banks as one of the sources to bridge the gap.

But the finance ministry officials said that it will take four to six weeks in negotiations till a stage is reached for the foreign commercial loans to be disbursed. They added if the foreign commercial banks just give an assurance to the IMF, it will be sufficient to strike a deal.

However, the foreign banks are reluctant to extend any fresh financing due to the junk credit rating of Pakistan.

The government had also placed bets on the $450 million project proceeds from the Geneva pledges and expected to receive over half a billion dollars from the outsourcing of the three international airports -- the two avenues that Pakistan may not tap immediately.

On Friday, Finance Minister Ishaq Dar had announced that the United Arab Emirates had given an assurance to the IMF for a $1 billion loan to Islamabad. Saudi Arabia had already made assurances for a $2 billion loan, according to Minister of State for Finance Dr Aisha Pasha.

...
https://tribune.com.pk/story/2412187/imf-puts-a-damper-on-early-deal-hopes
Click to expand...

I would love to see PDM supporters come to this post and defend PDM's incompetence. What has PDM done in the past year that hasn't damaged the economy?

This is about the 3rd or 4th time they've lied about securing the IMF deal, how do you expect the business community to trust them?

PDM supporters have never had the courage to hold corrupt people accountable and they are directly responsible for Pakistan's current and past situation.
 
Govt shares with IMF plan to secure $3b
Informs lender about its plan to secure a $450 million worth support loan from RISE-II budget

The Pakistan Muslim League-Nawaz (PML-N) led coalition government has shared with the International Monetary Fund (IMF) its plan to secure an additional $3 billion to bridge the financing gap as it expedites efforts to convince the lender to release the next loan tranche.

The Washington-based lender seeks “necessary” financing assurances at the earliest to conclude talks with the country on its stalled bailout, IMF mission chief for Pakistan Nathan Porter said last week.

The IMF had asked Pakistan to arrange $6 billion in external financing. The $6 billion financing gap had been worked out on the assumption that the current account deficit would remain around $7 billion in the current fiscal year.

The fund welcomed “the recent announcement of important financial support to Pakistan from key bilateral partners”, indirectly confirming the United Arab Emirates and Saudi Arabia's commitments. But these commitments are short of Pakistan's requirements.

According to reports, Islamabad has informed the lender about its plan to secure a $450 million worth second Resilient Institutions for Sustainable Economy (RISE-II) budget support loan.

The government shared with the IMF officials plans to get $1 billion from Asian Infrastructure Investment Bank (AIIB) and other commercial banks to materialize pledges secured at a Geneva moot.

Express Tribune
 
Ishaq Dar hopes IMF will soon sign deal with Pakistan as 'all conditions fulfiled'
Saudi Arabia and UAE have assured their commitments to provide $3 billion to Pakistan, says Dar

Finance Minister Ishaq Dar on Monday said that Saudi Arabia and United Arab Emirates (UAE) have assured their commitments to provide $3 billion to Pakistan, hoping that the inflation-stricken country will soon seal the deal with the International Monetary Fund (IMF).

The two sides are engaged in tough talks to reach a consensus on multiple conditions since the end of January for the release of $1.1 billion from a $6.5 billion bailout package agreed upon in 2019.

Speaking to Geo News today, the finance minister said that Pakistan has “fulfilled all the conditions” of the Washington-based lender which will soon pave the way for the release of the $1.1 billion tranche.

Riyadh will provide $2 billion while Abu Dhabi has promised to give $1 billion to Pakistan, Dar said, adding that the lender has also been informed in this regard.

The finance minister said all the conditions for the staff-level agreement between Pakistan and IMF have been fulfilled.

“Pakistan is hopeful that IMF will soon sign the SLA and get it approved by its Executive Board,” Ishaq Dar added.

The country’s foreign exchange reserves have fallen to cover barely a month of imports after the IMF funding stalled in November, hit by snags over fiscal policy adjustments after officials of the lender visited Islamabad in February for talks.

...
https://www.thenews.com.pk/latest/1...deal-with-pakistan-as-all-conditions-fulfiled
 
IMF facility revival hopes recede as reviews still unfinished
9th review talks, which are ongoing, were supposed to have been concluded by Dec 2022

Pakistan’s options for reviving the IMF programme are limited with the passage of every day. It is yet to be ascertained how the country will proceed to accomplish the existing IMF programme on its expiry deadline of June 30, 2023.

The IMF’s eleventh review under the $6.5 billion Extended Fund Facility (EFF) programme for Pakistan will become due tomorrow (Wednesday) at a time when Islamabad is still unable to accomplish the pending 9th review. Both sides had so far been unable to strike a staff-level agreement to complete the 9th review. Under the IMF programme, the tenth review had become due on February 3, 2023, but it could not be done.

Top official sources told The News on Monday that both the IMF and Pakistani sides were holding each other responsible for the unwarranted delay in the completion of the outstanding 9th review and reviving the stalled programme after the lapse of almost 80 days after both sides accomplished Islamabad parleys on February 9, 2023. Now the sources in the IMF say that they were still waiting for confirmation on external financing requirements despite Islamabad providing guarantees on $3 billion in additional deposits from the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) respectively. The IMF now wants confirmation on the remaining $2 billion from World Bank (WB), and Asian Infrastructure Investment Bank (AIIB) $900 million and seeking commercial loans from banks. Without additional $2-$3 billion confirmation, the IMF is reluctant to strike a staff-level agreement. On the other hand, Pakistani authorities argued that the Fund was playing politics with the Pakistani side as the agreement should have been signed much earlier. “It’s nothing but the political game is on” they added.

When contacted Dr Khaqan Najeeb former Advisor Ministry of Finance told The News the inordinate delay raises questions about the difficulties in completing the 10th and 11th reviews (worth over $ 1 billion) scheduled for February 3 and May 3 2023 respectively.

He said whether it’s delays in price adjustments, a credible circular debt management plan, filling the financing gap, petrol cross-subsidy, or payment of election expenses something or the other keeps propping up to hold back the staff-level agreement. Of course, exogenous events and geopolitics have their share of compounding the picture for Pakistan. He said it is most tragic to be happening at a time of the most serious domestic economic crisis and a challenging global scenario. IMF is the lender of last resort, probably it can move forward in that spirit. For Pakistan to remain near the brink of default is not a good option. In the short run, funding from friendly countries and revival of the IMF programme, clarity on the programme completion dates, and work on budget 2024 is the least that needs to be done, he concluded.

The News PK
 
IMF negates govt’s claim of meeting loan conditions
Mission official says upcoming budget details also need to be shared

The International Monetary Fund (IMF) on Friday said that the $1.2 billion 9th review of the bailout programme will be completed once the necessary financing is in place and the agreement is finalised, noting that there was an agreement on the issue between both the sides.

The statement, sent to The Express Tribune, highlights a widening trust deficit between Pakistan and the IMF, as it negates the claim made by the government with respect to meeting all prior actions necessary to complete the 9th review.

The government will also have to satisfy the global lender about the policies that it wants to roll out, including the budget for the fiscal year 2023-24 -- a demand that the finance ministry officials claim was tantamount to changing goalposts.

“The IMF continues to work with the Pakistani authorities to bring the 9th review to a conclusion once the necessary financing is in place and the agreement is finalized,” stated Nathan Porter, the IMF Mission Chief to Pakistan.

Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar had claimed that Pakistan met all the prior conditions agreed for reaching a staff-level agreement and there was no reason for holding back the agreement.

On Thursday, in an article published in an English day, Finance Minister Ishaq Dar had claimed that “Pakistan has already complied with all the prior actions for the 9th review with the IMF”. Dar further wrote that it was expected that the staff level agreement will be signed soon with the IMF which should be followed by the approval of the 9th review by the IMF board.

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https://tribune.com.pk/story/2415393/imf-negates-govts-claim-of-meeting-loan-conditions
 
PAKISTAN-IMF LOAN AGREEMENT DELAYED AFTER ‘NEW DEMAND’

Despite the assurances from friendly countries about external funds to Pakistan, the International Monetary Fund (IMF) still showing a lack of confidence and asking Islamabad to ‘do more’ to unlock loan programme, ARY News reported on Monday, quoting sources.

According to the sources, Pakistan has been asked to present a repayment plan for a $3.7 billion loan to the IMF in June as well as need to demonstrate stronger support from friendly nations in order to meet the commitment.

However, the IMF has reportedly not agreed to a proposal to exchange reserves equal to two months’ revenues, which would be valued between $11 to $12 billion.

Sources within Ministry of Finance revealed that the government has imposed Rs. 170 billion in taxes through the mini-budget in a bid to secure a staff-level agreement with the IMF, which was originally scheduled for February 9.

It is pertinent to mention here that the IMF issued the schedule of board meetings in which Pakistan is not included in any agenda until May 17.

Funding will also not be available from international financial institutions as the staff-level agreement is not reached, moreover, the budget-making process can be affected if transactions with the IMF are not concluded.
...
https://arynews.tv/pakistan-imf-loan-agreement-delayed-after-new-demand/
 
THE government has told the International Monetary Fund (IMF) it would not implement a fuel subsidy programme as the two sides negotiate a long-delayed $1.1 billion bailout for the country, Bloomberg News reported on Thursday.

The IMF has also said that it would “continue engagement with the government on the loan despite the ramp-up in political tensions”. The remarks came after the arrest of PTI chief Imran Khan on Tuesday sparked violent protests across the country.

As for fuel subsidy, Prime Minister Shehbaz Sharif in March proposed charging affluent consumers more for fuel, with the money raised used to subsidise prices for the poor who have been hit hard by inflation.

DAWN
 
Last-ditch efforts under way to salvage IMF programme
If the SLA is not struck in the next few days ahead of the upcoming budget the ongoing programme will fail

As Pakistan’s options recede for the revival of the stalled IMF programme, both sides will have to take tough decisions to break the existing deadlock.

Now last-ditch efforts are underway for a breakthrough ahead of the upcoming budget but if the deadlock persists over the next few days, hopes for reviving the IMF programme will fade.

The hopes are diminishing each day mainly because the ongoing programme of $6.5 billion under the Extended Fund Facility (EFF) will expire on June 30, 2023. The parleys between Pakistan and the IMF continue for the completion of the 9th Review under the EFF programme, which became due on November 3, 2022. The talks resumed from January 31, 2023, to February 9, 2023, but remained futile. Since then, the Staff Level Agreement (SLA) could not be signed till now.

If the SLA is not struck in the next few days ahead of the upcoming budget for 2023-24, scheduled to be unveiled on June 9, 2023, the ongoing programme will face a failure.

“There are a couple of options left for moving forward. The first is by signing the SLA on an immediate basis and forwarding Pakistan’s request before the IMF Executive Board for approving the next tranche of $1 billion and also securing an extension in the EFF programme period by a few months in order to accomplish the 10th and 11th Reviews,” top official sources said in background discussions here on Sunday.

The second option could be combining the 9th and 10th Reviews and for Pakistan to share upcoming budgetary numbers with the IMF.

Then the SLA should be signed after the announcement of the budget for 2023-24 and in case of its approval from parliament, the IMF’s Executive Board could approve combined tranches and also grant an extension to the EFF programme for accomplishing the 11th Review by July or August 2023.

“There are no easy options available; both sides will have to work out modalities for evolving a consensus. But with the existing approach of maintaining the status quo, no breakthrough can be achieved,” said the official.

...
https://www.thenews.com.pk/print/1072797-last-ditch-efforts-under-way-to-salvage-imf-programme
 
What is this endless "will he/won't he" saga of the IMF and Pakistan?

What are the IMF asking for? Some LGBTQ rights that Pakistan is unable to provide?
 
Stocks fell on Monday amid political polarisation and speculation that Staff Level Agreement (SLA) with International Monetary Fund (IMF) over a long-awaited bailout tranche may not materialise after all.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index opened on a positive note but turned bearish within minutes and maintained a steady decline through the day, eventually shedding 404.12 points, or 0.97 per cent, to close at 41,195.06 points.

Mohammad Arbsh, manager equities with Siddiqsons Limited, said that the expectations of new taxation with the upcoming budget coupled with Imran Khan’s statement that there are 80 per cent chances that he would be arrested on Tuesday sent the market on a downward spiral.

Meanwhile, Aba Ali Habib Securities’ Salman Naqvi said political polarisation and crucial court summons this week have made the market uncertain, and due to which despite having attractive rates there is no buying and the volumes have also diminished.
 
IMF spells out terms to unlock bailout
Urges Pakistan to follow Constitution as Shehbaz reaches out to Georgieva to revive loan talks

The International Monetary Fund (IMF) on Monday urged Pakistan to follow the Constitution in order to resolve its political disputes, as Prime Minister Shehbaz Sharif contacted Managing Director Kristalina Georgieva to revive the derailed $6.5 billion bailout package apparently in a last-ditch effort to avoid default.

The discussion between Shehbaz and Georgieva took place on Saturday after the finance ministry could not break the deadlock over the loan talks during the past four months, official sources told The Express Tribune.

Two days after the highest-level contact was established between Shehbaz and Georgieva, IMF Mission Chief to Pakistan Nathan Porter gave an unusual statement, expanding the IMF’s focus to the political arena.

“We take note of the recent political developments, and while we do not comment on domestic politics, we do hope that a peaceful way forward is found in line with the Constitution and rule of law.”

The statement came on the heels of an ongoing crackdown against the PTI workers, adductions of people, breach of the 90-day constitutional limit to hold elections in the two provinces and trial of civilians in military courts under the Army Act. Usually, the IMF does not comment on political matters.

In response to questions sent by The Express Tribune, Porter also spelled out the conditions that Pakistan has to meet to reach an agreement with the foreign lender. These include arranging foreign loans, approval of new budget in line with the IMF framework, and restoration of foreign exchange market’s proper functioning.

The sources said that the prime minister saw the IMF as the last resort to avoid a default and that was why he decided to intervene. After the conversation with the IMF chief, the prime minister instructed the finance ministry to share details of the next budget with the IMF.

...
https://tribune.com.pk/story/2419332/imf-spells-out-terms-to-unlock-bailout
 
Pakistan keen to cut a ‘new’ IMF deal
Govt slams fund’s official for interfering in domestic politics

Amid a stalemate on securing a bailout from the International Monetary Fund (IMF), Prime Minister Shehbaz Sharif has informed fund’s Managing Director Kristalina Georgieva about Pakistan’s intention to secure a new bailout.

Moreover, Minister of State for Finance and Revenue Dr Aisha Ghaus Pasha on Wednesday criticised IMF mission chief Nathan Porter’s comment on the country’s political situation, saying he should not “interfere in politically domestic” matters.

Sources told The Express Tribune that the prime minister had revealed Pakistan’s intentions to sign a follow-up bailout package during his telephonic conversation with the IMF managing director on the weekend.

Pakistan’s current $6.5 billion programme stood derailed and the efforts being made to revive it for the past seven months could not materialize. The programme is going to expire on June 30.

The sources said that the IMF chief reciprocated the premier’s views about the need for another package. Diplomatic corps and international financial institutions think that Pakistan cannot avoid default without securing a new IMF package.

In order to repay $25 billion debt in the next fiscal year, Pakistan has to have an IMF umbrella. The Ministry of Finance is also of the view that the follow-up programme is needed to reinforce and build upon the reforms initiated during the current programme, a senior official of the ministry said on the condition of anonymity.


...
https://tribune.com.pk/story/2419700/pakistan-keen-to-cut-a-new-imf-deal
 
US supports IMF loan program for Pakistan, says Yellen

United States (US) supports International Monetary Fund (IMF) program for Pakistan, said Finance Secretary Janet Yellen.

Pakistan’s economy is in turmoil amid financial woes and the delay in an agreement with the International Monetary Fund (IMF) that would release much-needed funding crucial to avoid the risk of default.

Addressing the committee of the House of Representatives, Janet Yellen said Pakistan is in need of a bailout package and Washington supports the revival of the IMF loan program for Pakistan.

The program to deal with the destruction caused by the floods is there. Meanwhile, Congressman Al Green also highlighted the devastation caused by the floods in Pakistan and urged the need for IMF and World Bank programs.

Meanwhile, Tahir Javed, a Pakistani-American Democrat leader, lauded the role of Congressman Al Green in Pak-US relations.

Earlier, Prime Minister (PM) Shehbaz Sharif expressed his optimism regarding Pakistan’s chances of striking a deal with the International Monetary Fund (IMF) this month, saying that the government has accepted all the global lender’s conditions and implemented them.

The prime minister made these remarks while addressing an inauguration ceremony of a Sports Complex in Lahore.

ARY
 
PM in last-ditch effort to salvage IMF deal
Shehbaz sensitises envoys about govt’s position

Prime Minister Shehbaz Sharif on Monday reached out to a nearly dozen influential global capitals to sensitise them about Pakistan’s efforts to revive the $6.5 billion bailout package amid wide gaps between Islamabad and the International Monetary Fund over budget figures.

The prime minister held a background meeting with the ambassadors from the Western, European and Asian countries, at least three participants of the meeting told The Express Tribune. The meeting took place just 11 days before the expiry of the current IMF programme, which could also be the last such interaction.

The prime minister apprised the foreign ambassadors about the efforts that Finance Minister Ishaq Dar and he personally made during the past many months, a participant of the meeting told on condition of anonymity.

The prime minister again showed the interest that the government was keen to get at least the $1.2 billion tranche out of the remaining $2.6 billion, which is attached with the completion of the pending 9th review, said the sources.

The government had invited the ambassadors of the United States, the United Kingdom, France, Germany, the European Union, Japan, China, Saudi Arabia, Qatar and the United Arab Emirates, according to the sources.

Some ambassadors sought clarifications from the government but assured that they would communicate Pakistan’s position to their capitals, according to another participant of the meeting. The ambassadors are also in touch with the IMF staff.

The PM’s Office did not issue any official statement after the meeting.

The sources said that the economic team counted on the efforts that the finance minister first made to invite the IMF team for review talks in October last year, but the IMF took three months to respond to the invite. The foreign diplomats were apprised that in February, the country undertook all the agreed steps, including Rs170 billion worth mini-budget, increase in electricity and gas tariffs, increase in interest rates and leaving the exchange rate at the market forces, according to the officials.

The only outstanding issue was the external financing gap which, according to the finance ministry, was also settled on May 27 during a telephonic conversation between the prime minister and IMF Managing Director Kristalina Georgieva.

But the gaps remain between the positions taken by Pakistan and the IMF, particularly on the issue of amendments in the proposed budget, hike in the monthly stipend of the Benazir Income Support Programme, increase in petroleum levy rates and correction in the foreign currency market.

...
https://tribune.com.pk/story/2422647/pm-in-last-ditch-effort-to-salvage-imf-deal
 
daytrader said:
PM in last-ditch effort to salvage IMF deal
Shehbaz sensitises envoys about govt’s position

Prime Minister Shehbaz Sharif on Monday reached out to a nearly dozen influential global capitals to sensitise them about Pakistan’s efforts to revive the $6.5 billion bailout package amid wide gaps between Islamabad and the International Monetary Fund over budget figures.

The prime minister held a background meeting with the ambassadors from the Western, European and Asian countries, at least three participants of the meeting told The Express Tribune. The meeting took place just 11 days before the expiry of the current IMF programme, which could also be the last such interaction.

The prime minister apprised the foreign ambassadors about the efforts that Finance Minister Ishaq Dar and he personally made during the past many months, a participant of the meeting told on condition of anonymity.

The prime minister again showed the interest that the government was keen to get at least the $1.2 billion tranche out of the remaining $2.6 billion, which is attached with the completion of the pending 9th review, said the sources.

The government had invited the ambassadors of the United States, the United Kingdom, France, Germany, the European Union, Japan, China, Saudi Arabia, Qatar and the United Arab Emirates, according to the sources.

Some ambassadors sought clarifications from the government but assured that they would communicate Pakistan’s position to their capitals, according to another participant of the meeting. The ambassadors are also in touch with the IMF staff.

The PM’s Office did not issue any official statement after the meeting.

The sources said that the economic team counted on the efforts that the finance minister first made to invite the IMF team for review talks in October last year, but the IMF took three months to respond to the invite. The foreign diplomats were apprised that in February, the country undertook all the agreed steps, including Rs170 billion worth mini-budget, increase in electricity and gas tariffs, increase in interest rates and leaving the exchange rate at the market forces, according to the officials.

The only outstanding issue was the external financing gap which, according to the finance ministry, was also settled on May 27 during a telephonic conversation between the prime minister and IMF Managing Director Kristalina Georgieva.

But the gaps remain between the positions taken by Pakistan and the IMF, particularly on the issue of amendments in the proposed budget, hike in the monthly stipend of the Benazir Income Support Programme, increase in petroleum levy rates and correction in the foreign currency market.

...
https://tribune.com.pk/story/2422647/pm-in-last-ditch-effort-to-salvage-imf-deal
Click to expand...

hahahaha
 
PM hopes to meet IMF MD in Paris
Foreign loans disbursements fall to just $8.4b this fiscal year

Prime Minister Shehbaz Sharif has sought a meeting with the managing director of the International Monetary Fund (IMF) on the sidelines of the summit for a new Global Financial Pact in Paris amid a steep fall in foreign loans disbursements to just $8.4 billion this fiscal year.

The cabinet sources told The Express Tribune that Pakistan has requested for a meeting between PM Shehbaz and IMF Managing Director Kristalina Georgieva on the sidelines of the Paris Summit that is taking place from June 22 to 23.

The premier is expected to leave for Paris on Wednesday (today). Minister for Information and Broadcasting Marriyum Aurangzeb did not respond to a question whether a meeting was scheduled between PM and the MD on the sidelines.

PM Shehbaz in the past one month has made a telephonic contact with Kristalina and also wrote three letters to her, counting Pakistan’s efforts to revive the stalled $6.5 billion package.

The premier on Monday also met with foreign ambassadors to apprise them about Pakistan’s efforts to restore the programme.

During this summit, the issues at stake are the repercussions of the multiple climate, energy, health and economic crises, particularly in the most vulnerable countries.

The summit will look into the ways for restoring fiscal space to countries facing short-term difficulties, especially the most indebted states.

The data released by the Ministry of Economic Affairs on Tuesday disclosed that Pakistan’s foreign loan inflows during the current fiscal year have significantly dropped, reaching hardly $8.4 billion. This represents a 37% decline compared to the previous year and falls far below the annual budget estimates.

...
https://tribune.com.pk/story/2422840/pm-hopes-to-meet-imf-md-in-paris
 
US ambassador asks for Pakistan’s plan ‘B’
Dar did not share details but says country is surviving without IMF

The United States asked Pakistan on Wednesday about its fallback option in case the International Monetary Fund (IMF) programme ends next week without disbursing the third-to-last loan tranche of $1.2 billion.

During a meeting with Finance Minister Ishaq Dar held in the Q Block, Donald Blome, the United States Ambassador, raised the question, according to finance ministry officials.

The “plan B,” as Pakistani authorities term it, is now the most sought-after blueprint that everyone is looking for, as the four-year IMF programme may meet the same fate as the 21 previous failed programmes.

Blome’s question came after Dar briefed the top US diplomat in Islamabad about the government’s efforts over the past several months to revive the $6.5 billion bailout package.

The meeting took place a day before Prime Minister Shehbaz Sharif is set to meet with the Managing Director of the IMF, Kristalina Georgieva, on the sidelines of the Paris Climate Finance Summit. The PM left for Paris on Wednesday for a two-day visit.

So far, the premier’s efforts to seek the managing director’s intervention have not achieved the desired results, including an interaction with ambassadors from the West, Europe, and Asia this week. PM Sharif has had telephonic contact with Kristalina in the past month and has also written three letters to her, highlighting Pakistan’s efforts to revive the stalled programme.

Sources say that Dar did not share many details about the fallback option but mentioned that the country was surviving without the IMF.

People privy to Pakistan’s fallback plan stated that the authorities would try to advance some of the government-to-government transactions to raise funds, including handing over four port berths to the United Arab Emirates (UAE).

The government is also relying on a $100,000 no-questions-asked foreign remittance amnesty proposed in the budget for the next fiscal year. However, if no breakthrough is achieved during the expected PM-MD meeting in Paris, the government can implement this new amnesty from June 25th.

In that case, a person can whiten $200,000 within 370 days, first by availing this facility before June 30th and then again in July as part of the next fiscal year’s limit, according to the sources.

If the military’s idea of the Special Investment Facilitation Council (SIFC) proves successful, the Gulf countries can provide some funds in advance for a few corporate farming projects in which they are interested, according to the sources. However, this plan is still in its infancy stage, although these countries have shown interest in joint ventures many months ago.

“The finance minister also informed the envoy about the progress on the ongoing talks with the IMF and stated that the government is committed to completing the programme,” according to the finance ministry.

Dar reportedly told the US ambassador that China helped Pakistan in a major way by refinancing $1.3 billion of foreign commercial loans ahead of time. However, despite all the difficult measures that Pakistan took since February this year, the finance minister stated in the meeting that the IMF was not cooperating, according to the officials.

...
https://tribune.com.pk/story/2422943/us-ambassador-asks-for-pakistans-plan-b
 
In last-ditch effort, PM Shehbaz Sharif meets IMF MD in Paris

Prime Minister Shehbaz Sharif on Thursday met Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, on the sidelines of the Summit for a New Global Financial Pact being held at Paris in France.

During the meeting, the two exchanged views on the ongoing programs and cooperation between Pakistan and IMF.

Recalling their recent telephone conversation on 27 May 2023, the premier apprised Ms. Georgieva of Pakistan’s economic outlook.

Shehbaz Sharif outlined the steps taken by the Government for economic growth and stability. He underscored that all prior actions for 9th Review under the Extended Fund Facility had been completed and the Government of Pakistan was fully committed to fulfilling its obligations as agreed with the IMF.

...
https://arynews.tv/in-last-ditch-effort-pm-shehbaz-sharif-meets-imf-md-in-paris/
 
Govt softens stance to meet IMF terms
Sources say govt offered to cut expenses by Rs200 billion and impose new taxes of Rs100 billion

Pakistan and the International Monetary Fund (IMF) on Friday narrowed down their differences after Islamabad offered to make adjustments in the budget and also immediately withdrew restrictions on imports.

Sources told The Express Tribune that the government informed the IMF that it was willing to make adjustments, both in the budget and taxation sides. The offer was equivalent to around 0.3% of the gross domestic product (GDP) but it was nearly half of the gap that the global lender had identified, they added.

The government offered to cut expenses by Rs200 billion and impose new taxes of Rs100 billion, the sources said.

The authorities were hopeful that if the ongoing round of talks remained successful and the staff-level agreement could be reached at the earliest. The sources said that the things really moved at a fast pace since Thursday.
The finance ministry did not officially comment on the development.

The discussions continued until late night after the IMF asked Pakistan to make further adjustments. At the next fiscal year’s projected size of the economy, the offer made by Pakistan was equal to around Rs300 billion but the exact figure could not be verified.

In case the IMF and Pakistan bridge the gaps in their positions, Finance Minister Ishaq Dar may announce these changes during his speech in the National Assembly, while winding up the budget debate. The speech is tentatively scheduled for Saturday (today).

A senior government functionary said on condition of anonymity that Pakistan had reached the halfway and now the IMF should come forward and cover the distance.

Of $6.5 billion total programme size, Pakistan has not yet received the amount of $2.6 billion because of the incomplete 9th, 10th and 11th reviews of the bailout package.

Prime Minister Shehbaz Sharif and Finance Minister Dar have repeatedly said that Pakistan had completed all the prior actions and the IMF should immediately approve the next loan tranche of $1.2 billion.

The programme is ending on June 30 and the IMF Managing Director Kristalina Georgieva told the prime minister during a telephonic conversation on May 27 that the programme could not be extended further.

The sources said that the IMF once again asked the government to withdraw the amnesty scheme. The government has offered no-question-asked scheme on bringing in up to $100,000 from abroad, which the IMF said would set a “damaging precedent”.

The IMF had also asked Pakistan to withdraw the newly proposed tax exemptions, which the government said were critical to achieve the next fiscal year’s 3.5% GDP growth target. The IMF chief wanted that all policy matters should be resolved at the IMF staff level.

...
https://tribune.com.pk/story/2423363/govt-softens-stance-to-meet-imf-terms
 
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