Minister of State for Finance welcomes revival of IMF’s Extended Fund Facility Program – Latest News – The Nation ThePipaNews

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Minister of State for Finance and Revenue Ayesha Jhaus Pasha welcomed the revival of the IMF’s extended funding facility, pointing to its essential role in boosting the economy.

Speaking at a special event, he said, the renewal of the IMF program will help us get $1.1 billion immediately and pave the way for financing from multilateral and bilateral donors.

He said Pakistan has a pressing need for financing at this time and this revival will not only help improve our economy and ability to meet international commitments but also stimulate the growth trajectory from which we deviated.

Participating in the discussion, MNA PML-N and an industrialist Qaiser Ahmed Sheikh said the approval of the IMF program would be a good start for the country’s economy. He said the previous PTI government had subsidized petroleum products, which tarnished the country’s image in talks with the IMF. Qaiser Ahmed Sheikh said that Pakistan has foreign reserves of about 8 billion dollars which are not enough to meet the import demand. He said, we have to work hard to improve the economy and make relentless efforts to increase self-reliance.

The PML-N MNA said that all political parties should put aside their differences and work collectively for the national economy. He said, in these critical times, a charter of economy is the need of the hour. He identified an increase in exports and encouraged foreign direct investment to strengthen the economy.

Qaiser Ahmed Sheikh said that Qatar and Saudi Arabia’s investment proposal in various sectors of Pakistan’s economy is a good development, which will increase employment opportunities and innovation capacity for our people.

Senior economic journalist Mehtab Haider, while tracing the delay in signing the IMF program in 2019, said the deal with the IMF that year required tightening monetary and fiscal policies and tightening demand to stabilize the economy. He said that the mistake made by the then PTI-led government was to change the entire economic team, including the Finance Minister as well as Governor SBP and Secretary Finance, without due consideration. Even the former finance secretary later publicly said that the PTI government had agreed to IMF’s tough conditions, which were lenient earlier.

Mehtab Haider said that in November 2021, the 6th review of the IMF was completed and the PTI government violated the agreement in February 2022. A clear example was subsidizing the price of petroleum products even at the start of the war in Ukraine. He said, contrary to the PTI government’s claim, the subsidy was also meaningless. In its last days, the IMF refused to even negotiate with the PTI government.

When the PML-N-led coalition government came to power, the IMF made it clear that subsidies on petroleum products needed to be removed and price hikes needed to be passed on to the people, said a senior economic journalist. The current government took all the tough economic decisions and even sacrificed their political capital which was necessary to stabilize Pakistan and save it from default.

He said that the current government during the talks with the IMF requested to increase the size of the program as well as extend the deadline. Now the extended funding facility is due June 2023 and the size has been increased to $6.5 billion. He said that the major challenge for the present government is inflation, which should be reduced by strong measures. He said that as the agricultural sector has been affected by the current floods, the government needs to provide soft term loans to the agricultural community.

Mehtab Haider said the IMF program is essential as it can open doors for multilateral and bilateral lenders to meet funding needs. He said that Pakistan will have to pay 22 billion dollars for debt repayment in the current financial year. The current account deficit is estimated to be an additional $10 billion. Moreover, Pakistan needs to build up its dwindling foreign exchange reserves from the existing $7.8 billion. So, our total funding requirement this fiscal year is about $40 billion. He said preliminary estimates of flood damage are close to an additional $10 billion. This will affect our growth, service and manufacturing sectors and agriculture.

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