KARACHI: Pakistan’s new finance minister wants the International Monetary Fund (IMF) to revisit some of the conditions associated with a $6 billion loan program that was approved for Islamabad in 2019 to shore up its dwindling economy, a top official said on Tuesday.
The International Monetary Fund Executive board approved a three-year, $6 billion loan package for Pakistan in July 2019 to rein in mounting debts and stave off a looming balance of payments crisis, in exchange for tough austerity measures. In March this year, the IMF said after a latest payment, Pakistan had received total disbursements of $2 billion under the Extended Fund Facility.
“Our finance minister informed the committee that the government is requesting the IMF to relax the [loan] conditions because we are not in a position to further increase electricity and gas tariffs,” Chairman National Assembly Standing Committee on Finance, Faiz Ullah Kamoka, told Arab News while discussing a recent hearing in which Shaukat Tarin briefed lawmakers about the economy.
According to Kamoka, the finance minister described the IMF’s demand to further increase electricity tariffs as “unjustified,” saying the country was already reeling from the harsh impact of the coronavirus pandemic.
According to the Pakistan Bureau of Statistics, electricity charges in Pakistan have increased by 29.06 percent during the July-April period of the current fiscal year.
“Global lenders have given relief to countries in which the virus impacted lives,” Kamoka quoted the finance minister as saying. “We cannot fulfil the IMF conditionalities under the current circumstances.”
Tarin, a banker-turned-politician, previously served as finance minister between 2008 and 2010 in the government of the Pakistan Peoples Party (PPP) and played a crucial role in helping the country avert a default by securing an IMF bailout.
On Monday, he reiterated that he would negotiate a deal with the fund as he had done in the past, saying the COVID-19 pandemic had declined the purchasing power of people and they could not be further burdened with rate hikes.
Discussing his economic vision, the finance minister said the country’s growth rate would have to be increased to five percent: “To make this happen, we will have to open our economy by increasing our spending through public sector development.”
The finance ministry did not return phone calls seeking comment for this piece.