imf-delegation-to-visit-pakistan-for-3-billion-bailout-talks-next-week

The newly established government in Pakistan announced its desire to negotiate a “longer and larger” economic rescue package with the International Monetary Fund (IMF), to sustain the country's emerging macroeconomic stability. 

 

Finance Minister Auran­gzeb Khan, a professional banker, said they are considering a reduction in the central bank's policy rate. The statement came in Khan's first formal media interaction after receiving a series of briefings on external account needs and the fiscal situation, though he cautioned about the monetary policy committee's autonomy. 

 

Mr Khan also promised to adopt total digitization of the tax system, from assessment to collection, to increase transparency and broaden the revenue base in line with the IMF conditions. 

 

He also announced the upcoming privatization of Pakistan International Airlines (PIA), the country's flag airline. 

 

The minister said that “the IMF team would be in Islamabad this week for a second assessment of the current $3 billion Standby Arrangement (SBA).” 

 

"We would be very keen to start discussions on another EFF (Extended Fund Facility) with them" during these talks, he said, adding that additional negotiations on the plan would take place on the margins of the IMF and World Bank spring meetings in Washington in April. 

 

Another official said, "We would at least kick-start the process and get this going. Let us see how they respond," Mr Khan added, expecting that the two sides will meet in April to discuss the next program's framework.

 

The minister did not say if Pakistan will seek IMF climate risk funding to supplement the EFF, despite Bangladesh recently receiving $3.3 billion from the Resilience and Sustainability Facility. 

 

There were other analytical assessments available, including one from the World Bank, that discussed expanding the economy from over “$300 billion to $3 trillion by 2047,” he added.

 

The finance minister also said that starting with the FBR reforms and digital expansion for openness and improved service, "we now need to stop leakages in various forms and shapes." 

 

"We have already begun discussions on who will provide knowledge, who will be the implementation partner, and what the end-to-end path for broadening the tax net would entail. This will play a significant role in preventing income leakage," he added. 

 

Keep in view that Pakistan is seeking a 3 billion dollar loan package from the IMF to sustain its economy and control rising debt. 

 

Meanwhile, the efforts were halted for a while after PTI head and former Pakistan Prime Minister Imran Khan wrote to the IMF, requesting that the package be reconsidered before the February 8 election fraud is investigated.