A staff level agreement with IMF is yet to be reached, multiple reports quoted secretary finance as saying, indicating a deadlock in the crucial 9th Review talks amidst a critical financial crisis in the country.
Earlier today, it was reported that Finance Minister Ishaq Dar will address a presser soon to announce a breakthrough in the dialogue.
Further, Prime Minister Shehbaz Sharif was reported to have approved the terms of the agreement. The IMF team visited PM House where they spoke with the premier, who is in Lahore, via video link.
The ongoing talks are related to the completion of the ninth review of a $7 billion loan programme.
“Everything is going alright,” he said in response to a question about the critical ongoing talks. “The final round is underway. I meet them (IMF delegation) every day and will today as well,” Dar said earlier today.
“It is expected [that the] matters will be settled today. We will be giving you the news soon,” he added.
Pakistan is expected to receive a memo from the international lender soon. Power losses, recovery, and subsidies on utilities govern the talks, while the Fund has also urged a cut in the defense budget.
The IMF put forth tough conditions as expected, but the Pakistani side was well-prepared, analyst say.
Economist Asad Butt told Khabar Say Aagay host Raza Rumi that the Fund wants Pakistan to cut subsidies and reduce expenditure. The lender is skeptical about commercial loans, and wants the country to exclude them from its agenda. He termed the reforms to curtailing bureaucratic expenditure a major challenge for the policymakers.
Another economic expert, Niaz Murtaza observed that the current economic crisis needs a ‘surgery’. “Success of talks with the IMF will open the doors for financial aid from China and Saudi Arabia, too.”
“Any agreement with the international lender will see a subsequent rise in inflation during the next six months, and this will have an impact on the forthcoming elections as well.” Pakistan, he stressed, needs financial reforms so that it doesn’t need to approach the Fund ever again. “Ideally, the talks should result in imposition of taxes on the wealthy. The next elected government will have to opt for reforms and that may be the last opportunity to do so.”
Pakistan seeks a $1 billion loan tranche as part of the $7 billion extended fund facility availed in 2019, as economic and political crises continue to intensify the situation.