Pakistan is expected to ink the agreement with the International Monetary Fund in the next few days, the finance czar said, to unlock over $1 billion under the stalled loan programme.
“We seem to be very close to signing the staff level agreement [with IMF] hopefully Inshallah in the next few days,” Finance Minister Ishaq Dar said at a ceremony in Islamabad.
The international country gave a long list of demands to the country before leaving the country last month. The IMF’s prerequisites aim to ensure Pakistan shrinks its fiscal deficit ahead of its annual budget around June.
Pakistan has already taken most of the other prior actions, which included hikes in fuel and energy tariffs, the withdrawal of subsidies in export and power sectors, and generating more revenues through new taxation in a supplementary budget.
He admitted that the process of the ninth review “took longer than it should have” while vowing that he and his team were “absolutely committed” to completing the IMF programme.
“Our economic difficulties compounded by the devastating floods of 2022, which affected 33 million people, caused physical and economic losses of around $30 billion despite fiscal constraints and limitations, the federal government and provincial governments have jointed decided and have allocated Rs452 billion for relief and rehabilitation work of flood affected people,” Dar said.
If needed, he added more support would be provided to the flood-hit people. Estimates showed that around $16 billion would be required in the next few years for the rehabilitation and reconstruction work in the next few years, he added.
Pakistan pledged at the Geneva conference that half of the bill would be met by Pakistan’s own resources. It amounts to around $8 billion or more than Rs3,200 billion, Dar said and added that all the spade work has been done.
International donors had committed over $10 billion to help Pakistan recover from ruinous floods last year. Officials from some 40 countries as well as private donors and international financial institutions gathered at a meeting in Geneva.
He shared the salient features of the austerity measures announced by Prime Minister Shehbaz Sharif:
Without naming, the finance czar also blamed the previous government for “economic mismanagement”, which according to him completely reversed the process which the country achieved during 2013-18—the PML-N’s last tenure.
He went on to add that the propaganda about the country going default on its international financial obligations was “completely ill-founded”. Dar reiterated the need for “charter of economy” to have a uniform policy in future.
“The government will welcome it. I think this is something on which we should act apolitical and we should do whatever best we can in the interest of the future economy of Pakistan,” he said and sought a way forward for economic stability on way forward.
“I have very firm faith that we would come out of this quagmire inshallah. It was deeper than before I would say it was much more complex than the previous two experiences I had as finance minister of Pakistan,” Dar said.
