By Staff Reporter
KARACHI: Pakistan is not on the agenda of the International Monetary Fund’s Executive Board for the rest of June, indicating no breakthrough on the ninth review under a $6.7 billion stalled bailout program that expires this month.
The IMF program began in 2019 and is scheduled to end on June 30 with around $2.6 billion remaining undisbursed.
The ninth review under the Extended Fund Facility was due in November 2022 but was delayed due to the government’s failure to implement agreed reforms and structural benchmarks, as well as violating the spirit of the previous reviews by artificially controlling the rupee rate and extending unfunded subsidies.
The tenth review was scheduled for February 2023 but has not taken place yet.
Pakistan barely has enough currency reserves to cover one month of imports and hoped to receive $1.1 billion from the IMF in November. However, the fund has insisted on a number of conditions before releasing any more funds.
Despite this, Pakistani authorities are still optimistic that the fund will complete the ninth review before the deadline and approve the tranche for Pakistan at any time. Prime Minister Shehbaz Sharif spoke to the IMF chief by phone and requested the early completion of the ninth review.
The IMF Resident Representative in Pakistan, last week, said that staff remains engaged to discuss policies to maintain stability.
“Policy talks are underway with Pakistan. However, the draft FY24 Budget ‘misses’ an opportunity to broaden the tax base in a more progressive way,” Esther Perez Ruiz, the International Monetary Fund’s resident representative for Pakistan, told the media.
Perez Ruiz added that the long list of new tax expenditures further reduces the tax system’s fairness and undercuts the resources needed for vulnerable recipients in the Benazir Income Support Programme.
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