Pakistan starts taking decisive actions to revive IMF loan: Foreign financing must for economic stability
WASHINGTON/ISLAMABAD: Pakistan’s economy faces multiple challenges including from slowing growth, high inflation, and large financing needs.
This all is coming on the back of devastating floods.
Discussions are ongoing between IMF staff and the Pakistani authorities toward a Staff Level Agreement on policies to complete the ninth review of Pakistan’s extended Fund Facility. The IMF said this in a statement issued in Washington on Friday.
The authorities are committed to implementing the necessary reforms. They’ve started to implement decisive actions to stabilize the economy and restore confidence.
While providing space to accommodate the needs related to the floods, including through an increase in social assistance through the Benazir Income Support Program, timely financial assistance from external partners will be critical to support the authorities’ policy efforts and ensure the successful completion of the review.
Pakistan-IMF Staff Level Agreement
A Staff Level Agreement will follow once the few remaining points are closed, including the financing assurances, what we’re looking for here is a standard feature of all IMF programs.
Aside from support provided by the IMF, Pakistan’s, EFF supported program receives financing from other multilateral institutions, including the World Bank, the ADB, and the AIIB, and bilateral partners, notably China, Saudi Arabia, and the UAE.
So, we do need to ensure that we have those financing assurances in place in order for us to be able to take the next step with Pakistan.
IMF has nothing to do with elections in Pakistan
Earlier, the IMF resident representative in Islamabad Esther Ruiz said that the decisions regarding the constitutionality, feasibility, and timing of the provincial and general elections rest solely with Pakistan’s institutions.
There is no requirement under Pakistan’s EFF-supported program that could interfere with Pakistan’s ability to undertake constitutional activities, IMF Resident Representative Esther Ruiz said in a short message sent to media persons.
Targets under IMF-supported programs are set at the aggregate general government level (aggregating across federal and provincial government) and within these, there is fiscal space to allocate or reprioritize spending and/or raise additional revenues to ensure constitutional activities can take place as required.
IMF rejects speculations about nuclear assets
Earlier, the Resident Representative of the IMF in Islamabad rejected the reports that the IMF has linked the revival of its loan program with the downsizing of the nuclear assets of Pakistan.
In a statement issued to the media, Esther Ruiz, the Resident Representative of the IMF in Islamabad denied attaching any such strings to the External Fund Facility (EFF).
“Regarding recent speculation that programme discussions with the authorities for the ninth review under the IMF-backed programme may have covered Pakistan’s nuclear weapons programme, I want to be categoric that there is absolutely no truth to this or any insinuated link between the past or current IMF supported programme and decision by any Pakistani government over its nuclear programme,” the official said.
