International Monetary Fund officials finished a week of meetings in Doha, Qatar, with no sign that they were going to restart the $6 billion rescue.
As recently as 2019, Pakistan sought help from the International Monetary Fund (IMF).
The political cost of reducing gasoline and energy subsidies is one of the most excruciating.
Imran Khan’s dismissal as prime minister has further exacerbated the country’s political crisis.
In order to appease the IMF, the new administration, led by Shehbaz Sharif, put off making tough political decisions. In the first place, Imran Khan’s administration went to the IMF, but he could not manage the economy, and a crisis developed under his watch.
With only enough money in the bank to cover two months of imports, Pakistan had planned to get $900 million this time around. It cannot afford to pay billions of dollars in fuel and gasoline subsidies. Pakistan would have been able to get more funds if the IMF had agreed to this new tranche.
The IMF concluded Pakistan had not implemented the policies agreed upon at the last assessment. It announced subsidies for petrol and electricity to continue by the government in February. For the IMF’s rescue to be a success, Pakistan is expected to see meaningful action and the elimination of these subsidies in the FY2023 budget.
According to a statement from the International Monetary Fund (IMF), the mission held “highly constructive discussions with the Pakistani authorities aimed at agreeing on policies and reforms that would lead to the conclusion” of the pending seventh review of Pakistan’s reform programme, which is supported by an IMF EFF agreement.
“During the mission, significant progress was made, especially on the need to continue to confront rising inflation and the large budget and current account deficits, while maintaining appropriate protection for the most vulnerable. The hike in policy rates that took effect on May 23 was a positive move in this direction”.
As the International Monetary Fund (IMF) has stated, it looks forward to working with Pakistan’s government to promote macroeconomic stability for the benefit of the country’s population.
The International Monetary Fund (IMF) met with Pakistani officials in Doha, Qatar, on May 18 and 25 to review Pakistan’s macroeconomic stability and sustainable growth strategies.
