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Further Discussions Needed With Pakistan on Its Budget Plans, Says IMF

by Staff Report

Screengrab from the press conference. Courtesy IMF

Global lender’s spokesman says it is ready to continue supporting Pakistan

The International Monetary Fund (IMF) on Thursday said that the global lender needed further discussions with Pakistan on Islamabad’s fiscal spending plans, structural reforms, and social spending, as the dialogue during a recent mission had been left incomplete.

Addressing a virtual press briefing, IMF spokesman Gerry Rice said the lender was conducting open and constructive discussions with Pakistan as part of the sixth review of the country’s 39-month, $6 billion Extended Fund Facility, which began in 2019. However, he did not clarify if the disbursements had been halted under the program pending the completion of the talks.

“We stand ready to continue to support Pakistan,” he said. “As the recovery gains strength, it will be important to accelerate the implementation of policies and reforms needed to address some of the long-standing challenges facing the Pakistani economy,” he added.

Shaukat Tarin, Pakistan’s finance minister, has stressed in multiple media appearances that the country could no longer afford to implement the IMF’s conditions, lamenting that they would boost inflation and cause great hardship for the common man. He told Parliament during an ongoing budget session that, for now, the IMF had agreed to allow Pakistan some time to try an “alternate” plan that did not impose new taxes or remove all subsidies, but instead focused on administrative measures to boost the tax base. The sixth review under the Extended Fund Facility would take place in September.

Tarin has claimed that Pakistan has no intent to exit from the IMF program ahead of its completion. However, he has also lashed out at the conditions imposed by the lender, telling Parliament on Friday that rampant inflation in the country was a direct result of the government being forced to go to the IMF for financial support.

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