IMF bars Pakistan from giving subsidy without approval
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Loading... - Dilip Sinha
- 04 May 2023
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The International Monetary Fund (IMF) — through the Memorandum of Economic and Financial Policies (MEFP) — has made it clear that Pakistan will not provide any kind of additional subsidy without prior approval of the lender as both sides struggle to arrive at a consensus on fiscal adjustment plans, The News reported.
Pakistan and the IMF have been negotiating since late January on an agreement that would release $1.1 billion to the cash-strapped, nuclear-armed country of 220 million people.
The issue which has hit a snag, is a plan, announced by Prime Minister Shehbaz Sharif in March, to charge affluent consumers more for fuel, with the money raised used to subsidise prices for the poor, who have been hit hard by inflation.
Despite meeting almost all conditions laid forth by the Fund, the coalition government is still struggling to convince the lender to release the tranche.
A day earlier, the federal government also sought US intervention once again to convince the IMF staff to move towards striking a staff-level agreement as Islamabad had fulfilled all the major conditions given in the Fund’s prescriptions.
“Pakistan and the IMF have evolved broader consensus that Islamabad will not provide any additional subsidy without prior approval of the Fund staff during the remaining period of the ongoing Extended Fund Facility (EFF) programme,” top sources privy to the development confided to The News on Wednesday. Read More…
