- Pasha claims that there is a “serious deficit” between Pakistan and the IMF.
- Regarding the IMF agreement, the minister states, “There is nothing to worry about.”
- Pasha states that the plan for a petroleum rebate is still being worked out.
ISLAMABAD: As the country urgently tries to open the delayed loan installment, Minister of State for Finance and Revenue Senator Aisha Ghaus Pasha stated on Wednesday that the federal government is confronting a difficult challenge in recovering the International Monetary Fund’s (IMF) confidence.
When the Senate Finance Committee convened to debate the IMF program, Pasha stated that there was “a serious trust deficit between Pakistan and the IMF.” The committee was chaired by Senator Saleem Madviwala.
The Washington-based lender has been negotiating with Pakistani officials to restart the $1.1 billion loan tranche that has been suspended since November. This loan tranche is a component of a $6.5 billion Extended Fund Facility (EFF) that was decided upon in 2019.
For Pakistan to open up other foreign financing options and avoid defaulting on its commitments, IMF funding is essential. The reserves of the State Bank of Pakistan (SBP) are at a crucial level of $4.6 billion, which is enough to handle four weeks’ worth of imports.
However, according to Aisha, “there is nothing to worry about” because Pakistan will shortly release the loan tranche after friendly nations gave the Fund guarantees.
The state minister told the committee that “we have made progress in securing financing from friendly countries and the IMF is now confirming details from those nations,” adding that foreign financing was a significant barrier to resuming the plan.
Pasha added that China has always supported Pakistan during difficult times and that Saudi Arabia and the United Arab Emirates would shortly provide financial assistance to the $350 billion economy.
Petrol subsidy
When discussing the government’s most recent effort to help the common people, the minister stated that the fuel rebate has not yet been fully developed.
She stated that the IMF would be made aware of the plan once it was placed on writing. The state minister said, “The subsidy on gasoline is still a suggestion, and its structure is still being worked out.
She went on to say that Pakistan has been under pressure from the IMF to offer tailored aid.
The government of Shahbaz Sharif had previously revealed a plan to raise gasoline prices for wealthy consumers in order to support costs for the poor, who had been particularly hard-hit by inflation, which had reached its highest level in 50 years.
After the statement, Esther Perez Ruiz, the IMF’s resident agent in Pakistan, claimed that the government had not informed the Fund about the plan.
Prior to any debt agreement, the lender required that Islamabad clarify the gasoline plan.
The operation, expense, targeting, safeguards against fraud and abuse, and mitigating measures of the gasoline subsidy plan are all things that the fund staff is interested in learning more about, according to Ruiz, and they will thoroughly review these aspects with the authorities.