Petroleum Minister Says Matters with IMF to be Settled Soon

The Minister of State (Petroleum Division), Dr. Musadik Masood Malik, has said that matters will be settled with the International Monetary Fund (IMF) in one-and-a-half weeks.

He spoke to the media in Islamabad today and revealed that fundamental issues have been settled with the lender, and the money phase will soon commence under its Extended Fund Facility (EFF) program.

The government had previously slashed the development budget for the Armed Forces of Pakistan by Rs. 72 billion to one-fifth of the amount that was granted on 10 June to achieve the IMF’s key requirement of generating a primary budget surplus in the next fiscal year.

One of the key prerequisites for the IMF to resurrect the rescue package is a primary budget surplus of Rs. 153 billion, or 0.2 percent of the country’s output. Although it is highly unlikely, the Minister for Finance, Miftah Ismail, now wants to get on staff level with the lender by the end of this week. The Finance Minister has also refuted the claims of the postponement of the IMF review.

Pakistan received combined economic and financial targets last week for the seventh and eighth reviews of its IMF bailout package. The government received the Memorandum of Economic and Financial Policies (MEFP) for both reviews after urgent meetings between the two sides last week.

Pakistan and the IMF managed to make headway on budget measures for 2022-23 in June, with Islamabad committing to more policy initiatives to revive the stalled EFF. The agreement resulted in the introduction of a 10 percent poverty alleviation tax (super tax) on 13 industries, including cement, steel, sugar, oil and gas, fertilizer, LNG, textile, banking, automotive, drinks, chemicals, and tobacco.

Pakistan began the 39-month, $6 billion IMF program in 2019, but less than half of the funds have been released so far due to the South Asian nation’s inability to meet benchmarks.