Finance ministry remains discreet on “tense” talks with IMF – Journal

ISLAMABAD: The Ministry of Finance continues to remain silent on the outcome of its long negotiations with the International Monetary Fund (IMF) for the relaunch of its extended financing facility (EFF) of $ 6 billion, the authorities having declared having received about $ 3.2 billion in foreign aid. in the first quarter of the current fiscal year.

Read more: Pakistan-IMF talks so far remain inconclusive

Informed sources said the protracted talks between the two sides, which lasted nearly three weeks, remained tense in Washington and authorities were given hard-to-finish goals before a memorandum of economic and financial policies ( MPEF) cannot be finalized. The program has been “on hiatus” since April of this year and the sixth review which should have been completed by June remains open while the next review is also due now according to the revised schedule.

The Fund looks forward to continued discussions on policies, reforms

The talks that originally began on October 4 with a virtual interaction and were due to end on October 15 have extended through October 23 with nothing to report publicly, an official said. There is a list of ‘do more’ actions that authorities should sort out with various stakeholders, he said.

From a schedule of tariff and structural adjustments in the gas and electricity sector to a series of revenue measures and the strengthening of regulatory institutions, including the central bank, to full transparency of financial flows in the sector public, much remains to be done to put the program on a normal course and ensure the flow of the fund, the official said, adding that details were yet to be discussed.

Finance Secretary Yousaf Khan, who had been engaged with the IMF since the start of the month, declined to engage with local journalists in Islamabad, while Prime Minister’s Finance Advisor Shaukat Tarin also remained silent on the outcome of his discussions with the staff mission of the IMF. However, IMF resident representative in Islamabad, Teresa Dabán Sanchez, said on Monday that the fund team remains engaged with Pakistani authorities to advance the work program. She said the fund “looks forward to continuing discussions with the Pakistani authorities on all the policies and reforms that could form the basis for the completion of the sixth review under the EFF.”

Read more: Shaukat Tarin leaves the United States without concluding negotiations with the IMF

Meanwhile, the Ministry of Economic Affairs (MEA) said on Monday it received a total of $ 3.2 billion in foreign aid from different sources in the first three months (July-September) of the current fiscal year. , an increase of $ 826 million in September alone.

This included about $ 3.1 billion in foreign loans and about $ 107 million in grants in the first three months. Major inflows in September included about $ 180 million from the Asian Development Bank and about $ 445 million from international development assistance from the World Bank. Total bilateral loans in the first three months were $ 110 million, $ 1.6 billion from multilaterals, $ 1.04 billion from international bonds, and about $ 458 million from commercial loans from banks. . Commercial loans included $ 215 million from Dubai Bank, $ 182 million from Standard Chartered Bank London and $ 61 million from Ajman Bank.

The MEA said the government has budgeted $ 14,088 billion in foreign aid for the current fiscal year, including $ 13,871 billion in loans and $ 217.44 million in grants.

Meanwhile, the finance ministry reported that the net addition of external debt and liabilities during the current government’s tenure amounted to $ 27 billion. In a written statement to the National Assembly, the finance ministry said external debt and liability figures were released on a quarterly basis. As a result, the total debt and external liabilities at end-June 2018 stood at $ 95 billion and rose to $ 122 billion at end-June 2021.

The Ministry of Finance also reported that the total public debt stood at Rs 39.859 trillion at the end of June 2021 and the per capita debt is currently around Rs 188,000.

The ministry said, however, that instead of measuring debt per capita, a better way to measure the level of indebtedness was to use the debt-to-GDP ratio used by countries around the world, as this ratio takes size into account. economy in relation to population levels. .

The ministry said Pakistan experienced one of the smallest increases in its debt-to-GDP ratio during the pandemic. The global public debt-to-GDP ratio increased by 13 percentage points, while Pakistan’s debt-to-GDP ratio registered a minimum increase of 1.7 percentage points in 2019-2020.

Posted in Dawn, le 26 October 2021

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