The crucial meeting of the International Monetary Fund (IMF) review mission team, which has landed in Islamabad to review Pakistan’s Extended Funding Facility (EFF) after it made two major changes as per the requirements of the IMF, kicked off on Tuesday.
Pakistan is direly banking on the success of the talks between the IMF team and Finance Minister Ishaq Dar to not only approve the review, release the pending tranche, but also to save the country from sinking into an economic meltdown.
The IMF review mission is headed by its chief Nathan Porter, who called on Dar on Tuesday and expressed hopes that Pakistan would meet the lender’s requirements in time.
The Pakistan government has already taken two major steps of increasing petroleum prices and letting its rupee value be evaluated and established by the market, resulting in a massive shoot of the US dollar by at least Rs 35 within 48 hours.
Dar has already stated that the tough decisions are being taken to meet the requirements and demands of the IMF, which is the only option left for the country to opt for and restore domestic and external sustainability, strengthening the country’s fiscal position and countering the fast pace of the country’s drift towards bankruptcy.
As per details of the meeting between the IMF team and Dar, economic and fiscal policies, and power sector reforms were discussed at length as part of the ninth review of the EFF.
“The Finance Minister briefed the mission on fiscal and economic reforms and measures being taken by the government in different sectors, including bridging the fiscal gap, exchange rate stability and the energy sector for the betterment of the economy,” said an official in the know of things.
“He (Ishaq Dar) also said that reforms are being introduced in the power sector and a high-level committee has been formed for devising modalities to offset the menace of circular debts in the gas sector,” the official added.
It is pertinent to mention that Pakistan is in desperate and dire need of restoration of the IMF programme as the government has lost all other options to handle its foreign exchange reserves, while the funding commitments from other countries are also linked to the revival of the IMF EFF programme.
The one positive aspect for Pakistan was the comment of the IMF review team chief Nathan Porter, who expressed confidence that Pakistan would meet the IMF requirements for the completion of the ninth review.
“Nathan Porter hoped that Pakistan would continue towards its progress on reforms in various sectors and will complete the IMF programme effectively and in time,” the official quoted above said.
It is hoped that the revival of the IMF programme would open the gateways to fetch new foreign exchange debt inflows of about $4 billion within 60 days, which would positively help the foreign exchange reserves and avert the looming risk of default.
However, in the process of fulfilling the tough demands of the IMF, Pakistan has already committed to put immense pressure on the masses by shooting up inflation between 29 per cent and 32 per cent from February onwards.