By Staff Reporter
ISLAMABAD: Pakistan is on track with the conditions of an IMF bailout programme and the country has completed all prior actions needed for disbursement of next chunk of aid in August, finance minister said on Wednesday.
“The government implemented all prior actions for reviving the augmented $7 billion IMF program except further reviewing the petroleum levy,” Minister Miftah Ismail said on Wednesday.
He indicated a further review in petroleum before a scheduled IMF’s board meeting in August to approve much-needed $1.2 billion loan tranche to Pakistan.
Officials said the government has planned to increase petroleum levy from August 1, 2022, to complete last prior action of the IMF for loan disbursement.
When levy action done, a Letter of Intent (LoI) will be signed by the Minister for Finance and Governor State Bank of Pakistan (SBP) in the first week of August and Pakistan’s formal request for the revival of the IMF program will be forwarded to Fund’s board for members review some14 days prior to the possible meeting by August 25 or 26, 2022.
Ismail said the IMF assessed an external financing gap of $4 billion but it was not part of prior action.
“A staff level agreement with the IMF was signed and the Fund staff assessed the external financing gap of $4 billion for the financial year 2023.”
Minister said the government implemented prior actions such as passing the budget for 2022-23, signing a Memorandum of Understanding (MoU) with the provinces to generate revenue surplus, rebasing power tariff notified, interest rate and LTTF rate revised upward and now Petroleum Development Levy (PDL) would be reviewed.
The government had already imposed petroleum levy of Rs5 per liter on diesel and Rs10 per liter on petrol.
Ismail claimed that the government would get additional financing of more than $4 billion during the current fiscal year. ‘One friendly country would invest in Pakistan’s stock market, and another country would provide additional oil on deferred payment and additional SDRs probably in December 2022. Pakistan would sell out its assets with buy-back conditions.’
He said strengthening anti-corruption law was part of the structural benchmark which was not new as it was part of IMF discussion since the completion of the 5th review under the existing Extended Fund Facility (EFF) program.
“We will hire experts from New Zealand and Singapore as well as representatives of the Pakistan Business Council (PBC) for making anti-corruption law of NAB and Public Procurement Regulatory Authority (PPRA) effective. He said that corruption has increased and NAB, as well as PPRA rules, failed to control this increasing menace.”
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