Tuesday May 17, 2022
With the economic situation of a country in limbo, a team of the Ministry of Finance, including Finance Minister Miftah Ismail, left for Doha on Tuesday to hold talks with the International Monetary Fund (IMF).
“Finance Division’s team is leaving for consultations with the IMF Mission at Doha from tonight. Meetings will start from tomorrow,” tweeted the ministry.
The review talks will focus on striking a staff-level agreement for the release of a $1 billion tranche under the Extended Fund Facility (EFF).
The talks are expected to continue for a week.
Islamabad will have to convince the IMF to revive the stalled $6 billion programme at a time when the government had not started eliminating the unfunded fuel subsidy after making a commitment with the global lender.
The government may offer to withdraw the unfunded fuel subsidy if it is able to strike a consensus among the coalition partners.
“We want to use it as a bargaining chip because we know that the IMF staff always stressed doing more. It is part of a strategy to move ahead if the IMF seems in a mood to move ahead,” a top official told The News.
The IMF is all set to ask policymakers for further tightening of fiscal and monetary policies. It will recommend taking additional taxation measures in the upcoming budget.
The IMF has asked Islamabad to jack up the FBR’s tax collection target of Rs7,255 billion for the next budget of 2022-23 against the desired target of Rs6,100 billion for the current fiscal year. The IMF is also recommending further jacking up the policy rate by 100 to 150 basis points in the coming monetary policy.