The Ministry of Finance rejected on Thursday what it called speculation regarding the ongoing 7th review of the International Monetary Fund’s (IMF) Extended Fund Facility (EFF), saying that negotiations are "continuing as planned". The ministry said the two sides remain "engaged on a regular basis" at a technical level through virtual meetings and data sharing.

The ministry added that the focus of negotiations under the current review has been on agreed targets between the two sides, as well as recently-announced relief and industrial promotion packages.

Days ago, Finance Minister Shaukat Tarin said the IMF had asked Pakistan to explain how it would fund a $1.5 billion subsidy package announced by Prime Minister Imran Khan.

“There are no issues. We have given them details as to where the funds would come from,” Tarin said, adding the IMF wanted details of the resources that would fund the subsidy in fuel and electricity, which Pakistan has frozen for the next four months until the new budget.

The IMF said it will need to see the agreements of the dividends of State Owned Enterprises (SOEs) as well as details of the spare funds the central government will get from provinces.

“We have done our homework,” Tarin said.

Meanwhile, the Finance Ministry was of the view that there is a consensus that all end-December agreed targets have been achieved, while progress on other actions mentioned in the Memorandum on Economic and Financial Policies (MEFP) for the 6th review has also been satisfactory.

IMF asks govt how it will fund subsidy package

On the relief package, the ministry said that complete details, including financing options, have been shared with the IMF and a general understanding has been developed.

“IMF has, however, indicated the need for some further discussions on the industrial promotion package over the next few days. An understanding is expected to be developed on the said package subsequent to those discussions,” it said.

IMF should have no concerns on relief package, says Tarin

The ministry said that upon the completion of technical talks, the text of the MEFP for the 7th review will come under discussion.

“The government is confident that the finalisation of the MEFP will lead to IMF Board meeting towards the end of April,” said the ministry, adding that the government remains committed to completing the IMF programme successfully in September.

This story was first published in Business Recorder on March 24, 2022.