The Shehbaz Sharif-led coalition government of Pakistan is willing to meet all demands of the International Monetary Fund (IMF), including the implementation of a market-based exchange rate, to revive the stalled IMF program on a short-term basis and avert a full-fledged balance of payment crisis.
The decision was taken during a two-day-long high-level meeting of the economic team. PM Shehbaz virtually chaired the meeting.
Following the PM’s approval, Secretary Finance Hamed Yaqoob Shaikh has formally written to the IMF mission chief requesting to send its mission to Pakistan as early as possible, preferably next week, to review and conclude a long-awaited agreement to revive the loan program.
“The government has concluded that there is no other choice but to revive the IMF program on an immediate basis, so we have decided to invite the IMF,” well-placed sources confirmed to a select group of reporters on Thursday night.
A senior government official told Dawn news that the government had discussed all four major conditions of the IMF on the sidelines of the Geneva conference and had completed its workings on these areas on the basis of the interactions.
“We are ready to move ahead with reforms committed under the program and we plan to implement all decisions during the course of talks with the proposed IMF mission,” the official said.
“They are also expected to show some flexibility given the recent engagements and economic challenges posed by the post-floods situation,” another official said.
The economic team, during the sessions, also reportedly finalized a macroeconomic and fiscal framework and attached conditions of the IMF. The plan is to first evolve a consensus on all the attached conditions with the Fund mission on the negotiation table and then implement them.
Under the revised macroeconomic and fiscal framework, the coalition government plans to convince the fund to cut the Petroleum Development Levy (PDL) target from Rs855 billion to Rs550 billion for the current fiscal year. The tax collection target of Federal Board of Revenue would remain intact at Rs. 7,470 billion.