The International Monetary Fund (IMF) has not discussed agreements between China and Pakistan, high-level sources told ProPakistani.
Sources said there have been no discussions regarding agreements between China and Pakistan. The IMF does not engage in discussing agreements between other countries, they said.
IMF is of the view it is contingent solely on Pakistan how much support it receives from financial institutions and friendly countries.
The IMF has suggested freezing the development budget as a measure to reduce deficits, adding that the Government of Pakistan retains autonomy in policymaking in this regard.
It also warned that failure to control circular debt could necessitate interest rate hikes in Pakistan. On another hand, the lender acknowledged that Pakistan has implemented its recommendations and made encouraging economic progress despite facing challenges.
The IMF urged long-term growth and to overcome all political hurdles to achieve it.
The lender is of the view that it will be premature to comment on a new program until the current arrangement concludes next month. It was also too early to say how much Pakistan would receive under a new program.
The IMF underscored the importance of aligning climate with economic goals. The recent increase in the Special Drawing Rights (SDR) quota of member countries by the IMF was also highlighted.
Further recommendations emphasized timely adjustments in the energy sector, improvement in the power sector’s transmission and distribution system, and systematic price increases in energy sectors to curb inflation.
The IMF urged for a cautious monetary policy on interest rates and regular analysis of gas prices. It further advised increasing the tax-to-GDP ratio to 15 percent.
Sources remarked that the IMF also sees Pakistan benefitting from a loan repayment facility. The lender is expected to present a comprehensive policy package to ensure the sustainability of the economy through loans and policy directives.
