ISLAMABAD: The International Monetary Fund (IMF) has extended by a day its review of Pakistan’s $3 billion bailout program that was due to conclude on Monday, a Pakistani finance ministry official told Arab News, amid Islamabad’s efforts to avoid a macroeconomic crisis and stabilize the fragile $350 billion economy.
An IMF team arrived in Pakistan last week to carry out the second and final review under the short-term loan program secured by Islamabad last summer. Pakistan has said it has met all the structural benchmarks and targets set by the lender, hoping that a successful completion of the evaluation will be followed by the release of a remaining tranche of around $1.1 billion.
The South Asian country has also expressed its interest in getting a new loan under the Extended Fund Facility (EFF) program as it continues to carry out reforms to strengthen its debt-ridden economy.
However, an official of the Pakistani finance ministry, who requested anonymity as he was not authorized to speak to media, said on Monday night the two sides could not complete the review agenda in the stipulated timeframe.
“The review agenda couldn’t be completed in the scheduled period, therefore the mission has extended it for a day for now,” the official said. “The letter of intent and staff-level agreement will be discussed tomorrow now.”
On Monday, Pakistani financial authorities briefed the IMF mission on the country’s annual taxation targets, ways to abolish subsidies in different sectors, digitization of the tax system and expansion in the tax net, according to the official.
“At the moment, Pakistan has been lagging on two fronts that are digitization of the taxation and bringing over 3 million retailers in the tax net,” he said. “The FBR has signed a memorandum this week for the digitization while the work on bringing the retailers into the tax net is underway.”
The global lender wants Pakistan to continue the economic stabilization and reforms agenda “till negotiation of the new loan program,” the official added.
Citing officials, Pakistani state media last week reported that Islamabad’s talks with the global lender for the second review of the ongoing program were “progressing positively.”
“Pakistan will move forward on the path of development and witness growth,” Information Minister Attaullah Tarar was quoted as saying by the state-run Radio Pakistan broadcaster. “Decisions of this government will yield positive results.”
Pakistan secured the $3 billion IMF program in last June after it narrowly escaped a sovereign default. Its debt-ridden economy has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23 percent, policy interest rates at 22 percent and record local currency depreciation.