WASHINGTON The International Monetary Fund (IMF) and Pakistan are getting closer to getting their loan package back on track. This is because Islamabad has taken steps to reduce its spending, raise energy prices, and improve tax collection, as the IMF asked.
Pakistan is getting closer to meeting an IMF requirement that the country have a primary budget surplus of 153 billion rupees, or 0.2% of the country’s GDP, for the new financial year. This is needed to get the bailout package back on track.
After the last round of talks, IMF Resident Representative in Islamabad Esther Perez Ruiz said, “Discussions between the IMF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue, and important progress has been made on the FY23 budget.”
Since then, Pakistan has taken other important steps to meet the needs of the IMF.
But Michael Kugelman, a scholar of South Asian affairs at the Wilson Center in Washington, thinks that the Fund wants more.
“I think the IMF wants to know more about how committed Islamabad is to meeting IMF criteria before agreeing to give Pakistan more money,” he said.
He said that the new government started off “slowly and indecisively,” because they wouldn’t get rid of the energy subsidy that the IMF wanted them to get rid of. This cost them in the last round of talks.
“It’s to Shehbaz Sharif’s credit that his government is now doing all the right things, like putting out an austerity budget and taking other steps to bring in more money. So, the money from the IMF should start to come in, “he said.
This assessment is also shared by the Bloomberg financial wire, which says that “Pakistan is probably closer to an IMF loan.”
