Category: IMF

IMF continues to pressure Pakistan to take pre-emptive measures, demands interest rate hike

The International Monetary Fund (IMF)  has urged Pakistan to tighten its monetary policy.

A virtual meeting was held between Pakistan and the IMF yesterday in which Efforts were made by Pakistan to complete the Staff Level Agreement.

SBP’s base interest  rate is currently 17 percent, while the IMF is demanding a further 2  percent increase in interest rates.

The IMF is pushing for tightening monetary policy in terms of inflation.

According to sources, In the meeting, Pakistan informed the IMF  about the advance measures, Pakistan also briefed on the financing of friendly countries, in the briefing on refinancing with China,  China’s refinancing decision of  $ 700  million was informed.

Sources said that  the IMF was also briefed on the financing of $ 1.2 billion from the UNITED Arab Emirates, in addition to the financing through shares in the uae and  Qatar’s stock market.

In the virtual meeting ,  Pakistan also presented a strategy for targeting foreign exchange reserves by June. 

 

IMF urges Pakistan to impose taxes on rich and subsidize poor

The Managing Director of the International Monetary Fund (IMF) has said that if Pakistan wants to improve the country’s economy, it has to ensure that high-income people pay taxes and subsidies are given only to the poor.

Speaking to German broadcaster Deutsche Welle on the sidelines of the Munich Security Conference, ChrystiaLina Georgieva said, “My heart goes out to the people of Pakistan, they have been devastated by the floods that affected one-third of the country’s population.”

“We are calling for steps that will enable Pakistan to function as a country, and not go into a dangerous situation where it needs debt restructuring,” he said.

“I want to focus on two things, the number one tax revenue, those who make good money in the public and private sector need to contribute to the economy, second subsidies should be given only to the needy people,” she said.

The Managing Director said that the IMF is very clear that the poor in Pakistan should be protected, it should not happen that the rich benefit from subsidies, the poor should benefit from it.

 

The IMF chief’s statement came after an IMF delegation returned earlier this month after 10 days of talks with Pakistani authorities without reaching any conclusion, although both sides agreed to continue the online talks.

 

 

 

With the resumption of the program after agreeing to the ninth review with the IMF, Pakistan is likely to release an installment of $1.1 billion out of the $6.5 billion program that was contracted in June 2019.

 

The foreign exchange reserves with the State Bank of Pakistan (SBP) have fallen to around $3 billion, which can be imported for barely three weeks, the resumption of the IMF program will also open other funding avenues for Pakistan.

 

The government is racing against time to implement tax measures and strike a deal with the IMF.

 

Finance Minister Ishaq Dar introduced the Finance Supplementary Bill 2023 in both the National Assembly and Senate, proposing measures to recover an additional Rs170 billion so as to meet the imf’s last precondition.

 

The IMF has given Pakistan a deadline of March 1 to implement all measures, but a large part of the tax measures of Rs 115 billion were already implemented by SROs from February 14.

 

Dawnews.tv

 

Surging prices leave Pakistanis unable to afford basic necessities | DW News

Pakistan is in the middle of its worst economic crisis in a long time. Sri Lanka’s meltdown last year was caused by the same things that are making things worse now: high inflation and low foreign exchange reserves. Even though Pakistan isn’t there yet, it’s on the brink, which makes people worry.

People are getting used to waiting in lines like this one. People in Pakistan queue for hours to get subsidised flour, a staple food. (“Surging prices leave Pakistanis unable to afford basic necessities | DW…”) Many just can’t afford to feed their families with the usual foods. This is why Pakistan wants to get money from the International Monetary Fund worth more than a billion dollars

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IMF has demanded a complete removal of electricity subsidy

International Monetary Fund (IMF) team has demanded a complete removal of electricity subsidy, raising GST on all products and goods from 17 per cent to 18 per cent

Differences between Pakistan and IMF on the issue of power sector subsidies, petroleum development levy target and GST continue, due to which technical-level talks have been extended for two days. has been done.

According to sources, technical-level talks of the IMF team were scheduled till Friday, but technical-level talks were extended to further consider some issues so that a final conclusion could be reached in the policy-level talks.

Pakistan and the IMF have not been able to agree on some issues, Pakistan has presented various alternative proposals to overcome the fiscal deficit, the IMF has also demanded to end the subsidy given on electricity to the export sector so that the circular debt of Rs 952 billion can be reduced due to the increase in electricity prices. Trying to convince the team.

Regarding the subsidy, the two teams have agreed in principle and pakistani authorities have prepared to reduce the basic deficit and under the revised circular debt management plan, the amount of additional subsidy has been reduced to Rs 605 billion