ISLAMABAD: Pakistan and the International Monetary Fund (IMF) are reported to have failed to reach a staff level agreement within the stipulated time to revive the stalled $6.5 billion bailout package, delaying the disbursement of $1.1 billion in funding critical to keeping the South Asian economy afloat.
“Virtual discussions will continue in the coming days,” IMF Pakistan Mission Chief Nathan Porter said in a statement, adding that considerable progress had been made.
The statement, issued after the mission concluded its 10-day Pakistan visit, welcomed Prime Minister Shehbaz Sharif’s commitment to implement policies that are required to “safeguard macroeconomic stability”.
The IMF statement said: “The IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions.
“Considerable progress was made during the mission on policy measures to address domestic and external imbalances. Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector.
The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development.
“Virtual discussions will continue in the coming days to finalize the implementation details of these policies.”
Official sources said the Pakistani authorities had hoped that they would convince the IMF about its good intentions regarding implementation of all outstanding conditions in a gradual manner.
But the hopes dashed during the 10-day visit by the IMF mission, which ended on Thursday without a staff level agreement.
The government remained short of providing adequate and convincing assurances to the IMF mission, led by Nathan Porter. Finance Minister Ishaq Dar held back-to-back meetings but remained short of the end-goal to get a staff level deal done.
