KARACHI, May 23(ABC): Pakistan and the IMF are likely to go above and beyond to complete the seventh review under the bailout programme, the State Bank of Pakistan (SBP) chief was reported, implying that the ongoing talks could last longer than planned to cover the budgetary procedure.
“Talks may continue beyond May 25 for a few more days, but the IMF will hopefully see a positive statement from the Fund before they extend,” Dr Murtaza Saeed, acting governor of the SBP, told a virtual brief from Doha. “Budget preparation is part of the current review talks, and it can take some more time to finalise.”
Last Wednesday, Pakistan and the IMF began long-awaited talks to conclude a review that, if successful, will unlock approximately $900 million in the seventh tranche.
Miftah Ismail, Pakistan’s finance minister, arrived in Doha on Monday to continue talks with the IMF. Pakistan has already asked the IMF to increase the size and duration of its $6 billion programme during a meeting with IMF officials in Washington last month.
But the thorny issue of billions of rupees’ worth of fuel subsidies, announced by former prime minister Imran Khan and continued by incumbent Prime Minister Shehbaz Sharif, could jeopardise the loan revival talks.
Dr Saeed stated that the government would look into various options for withdrawing or phasing out fuel subsidies. “In the new fiscal year, we see the withdrawal of fuel subsidies… “Various options are under discussion to withdraw it,” he said.
But Finance Minister Miftah Ismail had ruled out the reversal of fuel and power subsidies, which are politically sensitive for the new government, ahead of his talks with the IMF officials. “The nation can’t afford to raise fuel costs and will try and convince the IMF to offer financing without ending subsidies on gasoline and diesel,” Ismail told reporters in Karachi.
