In a policy statement to the National Assembly Standing Committee on Finance, Dr. Aisha Pasha, the Minister of State for Finance, disclosed that the International Monetary Fund (IMF) declined Pakistan’s appeal to decrease the requirement for $6 billion in new loans. This leaves the Pakistani government with no choice but to attempt to reactivate the agreement.
During the committee meeting led by Qaiser Sheikh of the Pakistan Muslim League-Nawaz (PML-N), members deliberated the potential application of the newly implemented Contempt of Parliament law against Finance Minister Ishaq Dar due to his ongoing absence.
Dr. Pasha shared that Pakistan had sought IMF’s consent to lower the $6 billion external financing need based on new current account deficit figures, but the request was not granted. The IMF continues to insist on fully arranging the $6 billion. Despite Prime Minister Shehbaz Sharif’s appeal to IMF Managing Director Kristalina Georgieva, the IMF’s position remained unaltered.
When queried about a contingency plan should discussions with the IMF not produce satisfactory outcomes, Dr. Pasha asserted that returning to the IMF was the only feasible option and denied the existence of an alternate plan. This contradicts Finance Minister Dar’s prior suggestion that Pakistan could operate with or without the IMF’s assistance.
Dr. Pasha also declared that Pakistan had secured agreements for $4.5 billion from Saudi Arabia, the United Arab Emirates, the World Bank, and Geneva pledges. However, the additional $1.5 billion could only be obtained upon finalizing the staff-level agreement.
Despite these setbacks, Dar displayed optimism, expressing his confidence that Pakistan’s external financing is well-arranged and that a staff-level agreement would be formalized within the month.
Read: Finance Minister Dar Announces Completion of IMF Review, Addresses Funding Gap
Furthermore, Dr. Pasha reported that the government had shared the budget for the upcoming fiscal year with the IMF and is awaiting their feedback. She insisted that the budget broadly aligned with the IMF’s recommendations.
However, the committee was disappointed by the government’s decision to withhold the budget figures from the parliament while sharing them with the IMF. The meeting also aimed to discuss the fiscal year 2023-24 budget strategy paper. Still, it wasn’t ready due to the PM’s decision to establish eight separate committees on budget matters.
The committee also examined import restrictions and allegations of illegal import practices. Deputy Governor SBP Dr. Inayat Hussain confirmed that these claims are under investigation, and necessary enforcement and corrective actions will be taken.
