The International Monetary Fund (IMF) has agreed to add another bill 2 billion to Pakistan’s ongoing ছয় 6 billion loan program. It also agreed to extend the program for another year. The loan is being provided to keep Pakistan’s dormant balance of payments and foreign exchange reserves normal. News Dawn.
Finance Minister Miftah Ismail said on Sunday that the IMF had been asked to increase the debt of the remaining three billion dollars of the economic recovery package to five billion dollars. Pakistan has already received three billion dollars under this package.
Finance Minister Miftah Ismail told a news conference at the Pakistani embassy in Washington that an IMF official-level delegation would be sent to Pakistan to discuss the request for a loan increase. Technical talks on Pakistan’s proposal are expected to begin on Tuesday.
Miftah Ismail added, “We hope that the official level agreement on the extended loan program will be finalized soon.” However, he could not say whether the next part of the loan would be available for about 1 billion before the next budget.
To get this loan, the recent subsidy has to be withdrawn completely and other steps have to be taken in the forthcoming budget. The IMF has agreed to allow the new government to withdraw existing subsidies on energy and power as soon as possible.
At present, the government is giving a subsidy of Rs 21 per liter of petrol, Rs 51.52 per liter of diesel and Rs 5 per unit of electricity. Last Friday, Miftah Ismail agreed to the IMF’s advice to reduce energy subsidies and cancel tax exemptions for traders.
The huge decline in foreign debt and expatriate income has hit Pakistan’s balance of payments and foreign exchange reserves. Global fuel prices increase the pressure on the economy. In this situation, Pakistan borrowed six billion dollars from the IMF for three years in 2019. However, there has been a slowdown in the disbursement of loans due to concerns over the promised reforms in the economy. So far, Islamabad has received only 3 billion in loans.