According to sources, the International Monetary Fund (IMF) is now developing a policy statement for a prospective new bailout program for Pakistan.
IMF Begins Work on New Bailout Program For Pakistan
This follows the lender’s visit to Pakistan, during which the IMF’s technical team, under the direction of Marijn Verhoeven, successfully completed a second round of negotiations with Pakistani officials.
The IMF delegation had lengthy conversations with representatives of the Ministries of Finance and Commerce while they were there.
Previous Policy Paper
According to officials in the Finance Ministry, the IMF had already created a policy paper in 2019 that included requirements for a loan program with Pakistan.
These requirements included hiking the rates of personal income tax, beverage taxes, federal excise duty for the tobacco industry, removal of pointless GST exclusions, and Petroleum Development Levy (PDL) on petroleum products.
Based on these requirements, Pakistan agreed to accept the IMF’s loan package.
But the current standby agreement between Pakistan and the international lender is not the same as the current talks.
The technical team is reassessing the 2019 policy paper in view of Pakistan’s present economic circumstances.
New Set of Policies
The lender wants to come out with a fresh set of policies that are in line with the requirements and difficulties that Pakistan faces today.
The talks are intended to produce an extensive report detailing important improvements, Ministry of Finance sources underlined.
According to reports, the goal is to offer a path for economic development in the framework of the current situation, taking into account the significant changes that have occurred in Pakistan’s economic landscape since 2019.
The expectation among the sources was that the proposals that emerged from these talks would be pivotal in determining the post-election economic policies of the next government.
It appears that the lender is actively developing a new loan package to meet Pakistan’s changing economic needs.
The IMF team expanded their discussions on Tuesday from the Ministry of Commerce to the Ministry of Finance.
Concurrently, a two-and-a-half-hour meeting held by a task force, formed by Dr. Shamshad Akhtar, the interim finance minister.
The task force briefed the IMF team on its findings, with a focus on reform recommendations for economic recovery.
According to additional sources, the lender is pushing for more money to be given to the Benazir Income Support Program in order to help the less fortunate.
Furthermore, environmental issues were a major priority, with the IMF highlighting the necessity of taking action against environmental pollution and climate change.
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