Pakistan’s government has requested the International Monetary Fund (IMF) to send the review mission to the federal capital next week.
Local news channel “Geo News reported that the government has concluded that there is no choice but to reactivate the IMF program immediately; thus, they have decided to ask the IMF for a review next week.
A day earlier, PM Shehbaz agreed to execute stringent IMF recommendations to break the deadlock and complete the ninth review required to release a $1 billion tranche under the $7 billion Extended Fund Facility (EFF).
The sources revealed that the finance secretary has written to the Fund requesting its review mission, “hopefully, the lender will reply positively.”
The PM’s economic team completed a macroeconomic and fiscal framework with IMF criteria. After consulting with the Fund mission, it would be implemented.
A top official added that Q Block (Ministry of Finance) policymakers were concerned that even if Islamabad adopted the IMF’s recommendations by raising taxes, power and gas prices, and the currency rate, the Fund staff might deem them insufficient.
Thus, the government agreed with the IMF on all requirements before implementing them.
Policymakers agree that Islamabad must temporarily break the deadlock and restart the IMF program to avoid a balance of payment crisis.
The government has completed the macroeconomic and fiscal framework for the current fiscal year to complete the ninth review.
If the ninth and tenth reviews cannot be completed by the first week of next month, they may be combined. After that, Pakistan authorities would make last-ditch efforts to finish the review alone.
After the IMF Executive Board approves the next tranche, both sides could begin talks to complete the next review.
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