ISLAMABAD, Jun 14 (DNA): The top International Monetary Fund (IMF) official in Pakistan has asked the country to “do more” to achieve the key targets laid out by the Fund for the resumption of the loan program.
In a statement, IMF’s Resident Representative for Pakistan, Esther Perez
Ruiz said the Fund is evaluating the annual budget for the fiscal year
2022-23 presented by the federal government.
The federal government, Friday, tabled the annual budget with a total
outlay of Rs9.502 trillion, of which Rs7.4 trillion will be financed by
taxes and non-tax revenues.
The budget estimates show that the government intends to collect Rs720
billion in petroleum development levy, a key indication that it would
reimpose the levy on petroleum products.
Ruiz said that the talks are underway for further clarity on the revenue
and expenditures’ targets estimated by the government.
“IMF is ready to continue its support to stabilize macro economic
framework,” Ruiz added.
The statement came after Finance Minister Miftah Ismail said Pakistan
will default if the government does not abolish subsidies and raise the
prices of petrol and electricity.
In an interview to a private television channel, the finance minister
said without the hike, there would be no agreement with the IMF, adding
that without the Fund’s support, the country would default.
Pakistan has sought IMF’s support as its economy has been hit by
crippling national debt, galloping inflation, widening current account
deficit and a plummeting rupee.
However, a major sticking point between the two parties were the costly
subsidies — for fuel and electricity — which the IMF wanted to be
rescinded in full.
The government, in partial fulfillment of the Fund’s condition, hiked
the prices of petrol and diesel by Rs60 in less than a month. However,
it is still providing a subsidy, while collecting “zero” tax.
Ismail linked Pakistan’s economic stability to the deal with the IMF,
saying that without it, other lenders like the World Bank and Asian
Development Bank would not give “even a single penny” to Pakistan.
“I have told the prime minister that we have to take tough decisions.
The prime minister is unhappy with increasing the prices of petroleum
products. Whenever I send a summary [for price hike], the ministers
curse me,” Miftah lamented.
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