The International Monetary Fund (IMF) Tuesday agreed to Pakistan’s request of providing relief via the Benazir Income Support Programme (BISP) to the poor segment of the society but insisted on “strict adherence” to financial discipline.
IMF’s review mission is Pakistan for technical and policy level discussions to revive the $7 billion Extended Fund Facility stalled since months.
During the first session today, the IMF’s review mission, headed by Nathen Porter, identified the budget deficit and slippages, reiterating its strict stance on implementing the conditions laid forth by the lender.
Finance Minister Ishaq Dar is leading the Pakistani side as the cash-strapped nation launches renewed efforts to complete the pending ninth review.
Analysts have termed the technical level talks “toughest” as the Fund has refused to give any leniency in its conditions set for the revival of the loan facility.
Pakistan is gripped by a major economic crisis, with the rupee plummeting, inflation soaring and energy in short supply. The government of Prime Minister Shehbaz Sharif, fearful of backlash ahead of general elections, put up a resistance to tax hikes and subsidy curtailment as demanded by the IMF.
But in recent days, with the prospect of national bankruptcy looming and no friendly countries willing to offer bailouts, Islamabad agreed to swallow the bitter pill.
The government loosened controls on the rupee to rein in a rampant black market in US dollars, a step that caused the currency to plunge to a record low. A sudden increase in prices of petroleum products is also a result of the IMF conditions.
The two sides, on the first day of the technical talks, reviewed the economic situation of Pakistan and the ninth review of the bailout programme — which is pending since September.
