Govt, IMF discuss policies, reforms required to complete 9th review

Dar apprises IMF mission of planned power sector reforms

The government and the International Monetary Fund (IMF) on Tuesday began discussions on the country's economic and fiscal policies and the reforms required to complete the much-delayed ninth review of a $7 billion loan programme.

A delegation of the international money lender led by IMF Mission Chief Nathan Porter held a meeting with Finance Minister Ishaq Dar and other officials at the Finance Division in Islamabad.

The meeting was also attended by IMF Resident Representative Esther Perez Ruiz, Minister of State for Finance and Revenue Dr Aisha Ghous Pasha, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, State Bank Governor Jamil Ahmad, finance secretary, FBR chairman and other government officials.

Finance Minister for Finance and Revenue Mohammad Ishaq Dar on Tuesday told the International Monetary Fund (IMF) review mission that reforms are being introduced in the power sector and a high-level committee has been formed for devising modalities to offset growing circular debt in the gas sector.

Dar extended his gratitude to the Managing Director of IMF on the continuation of talks and shared that as finance minister he had successfully completed the IMF programme in the past and that the government was committed to completing the present programme. He extended all his support to the Mission and committed to working together for reaching an agreement to complete the 9th review under the Extended Fund Facility (EFF).

Porter expressed his confidence that the government will meet the IMF requirements for the completion of the 9th review and hoped that Pakistan would continue towards its progress on the reforms in various sectors and complete the IMF programme within time. He added that IMF and Pakistan will be working together on fiscal reforms.

A press release issued by the ministry after the meeting said Dar briefed the delegation about the government's fiscal and economic reforms in various sectors, including energy, and measures to bridge the fiscal gap and stabilise the exchange rate. He also informed the IMF mission that reforms were being introduced in the power sector and a "high-level committee has been formed for devising modalities to offset the menace of circular debt in the gas sector".

Dar assured Fund officials that Pakistan would complete the ongoing programme. He extended all his support to the mission and committed to working together to reach an agreement to complete the ninth review under the Extended Fund Facility (EFF), according to the press release. The ministry's press release said IMF Mission Chief Porter expressed confidence that the government would fulfil the requirements for completing the review and hoped that Pakistan would continue towards its progress on the reforms in various sectors and complete the IMF programme within time effectively. Porter said IMF and Pakistan would be working together on fiscal reforms, it added.

Experts have termed the resumption of the stalled IMF programme crucial for the cash-strapped economy, which has seen its foreign exchange reserves fall significantly in recent months.

Earlier, a senior official of the Finance Ministry on condition of anonymity told Business Recorder that there is no other option but to implement the conditions agreed with the IMF and implement structural reforms in the power sector. Moreover, they said the government has to increase electricity and gas prices and will have to impose taxes as the gap between revenue and expenditure has been increasing.

Pakistan entered a $6bn IMF programme in 2019, which was later expanded to $7bn, and the ninth review is currently pending.

Talks on the review were originally scheduled to be held in October but kept on facing delays. The country's foreign exchange reserves have depleted to $3.7bn, which is not enough to cover even three weeks of imports.