Pakistan to convince IMF over energy subsidies amid Political Crisis
As the talks start in Doha, the new government will try to convince IMF over subsidies amid the recent political crisis.
Earlier, Pakistan had committed to increasing oil prices to avail IMF program.
But prime minister Shahbaz Sharif had refused to increase oil prices due to possible political backlash.
Now, allies of PML-N have extended support to Sharif to raise oil prices.
The government has not increased the prices of petroleum products for May, extending Rs 118 billion subsidy.
Now, the program is understudy to increase oil prices for the elites while protecting the poor segment of society.
The 7th Economic Review Talks between Pakistan and the IMF began in Doha Wednesday.
Finance Ministry has informed in a tweet.
Pakistan is facing a financial crisis of a balance of payment.
Therefore, it is seeking a bailout package from IMF.
Finance Minister Mr. Miftah Ismail will lead the negotiating team.
A day earlier, the ministry of finance said that a delegation from the division of finance had traveled to Doha to speak with the IMF mission.
If negotiations with the IMF are successful, Pakistan’s halted program will resume for the next installment of the loan.
The negotiations were held for the first time since Prime Minister Shehbaz Sharif assumed power in April of last month.
Following the talks, Finance Minister Miftah Ismail stated that he had urged the IMF to expand the loan program’s value and term.
During a press conference in Washington, he stated that the IMF had agreed in principle.
But that formal negotiations were now underway.
The conversations are likely to continue into the next week.
Finance Minister Miftah Ismail stated that he wants the two sides to “reach a common ground” on the issue of subsidies.
The previous government had entered into a six-billion-dollar IMF bailout program in 2019.
It was unable to execute completely over failure to cut subsidies.
Islamabad has got $3 billion thus far, and the program will conclude later this year.
Officials are requesting a program extension through June 2023, as well as the release of the next $1 billion installments.
Michael Kugelman, deputy director for South Asia at the Wilson Center in Washington, stated, “It is an administration that has failed to take tough political moves to offer eventual economic relief; nonetheless, that is the exact sacrifice it must make by going to the IMF.”
