Prior to the release of the budget for 2023–24, the IMF’s Managing Director responded to Prime Minister Shehbaz Sharif and made it clear to Islamabad that three requirements must be met before a staff-level agreement can be reached.
These three needs from the IMF included implementing a market-based exchange rate in order to move towards staff-level consensus, proposing and receiving approval of the budget for 2023–2024 that was in line with the IMF’s objectives.
Although Pakistani authorities asserted that they heard nothing from the IMF following the release of the budget, both parties preferred to remain silent regarding the response given by the IMF’s Managing Director to the Prime Minister of Pakistan prior to the release of the budget for 2023–24.
IMF MD and PM Shehbaz Sharif
According to the sources, the IMF’s MD answered to Prime Minister Shehbaz Sharif’s phone call with clarity and stated that the staff-level agreement would only be completed if the IMF staff’s given instructions had been followed.
The Washington, DC, office of the IMF, the Islamabad office, and the Ministry of Finance were all contacted by this correspondent with inquiries, but until the report was submitted, no one provided an official comment.
Ishaq Dar, Pakistan’s finance minister, on the other hand, continued by stating that there was no justification for the staff-level agreement’s delay and expressed continued optimism regarding the IMF’s rebirth.
Mr. Dar claimed that the government has carried out all necessary strict measures, including the imposition of Rs. 170 billion in tax measures in February 2023 as well as other actions for resuming the IMF program.
Regarding the external financing gap, the minister stated that while it was estimated by the IMF to be $7 billion due to the increased current account deficit, it was only $3.3 billion in the first ten months of the current fiscal year as opposed to $13.7 billion during the same period of the previous fiscal year.
For the current fiscal year that ends on June 30, 2023, a $4 billion current account deficit was now anticipated.
He claimed that even though the IMF was still using its previous estimate, the financing gap on external accounts should have been lowered.
He claimed that some internal and external forces were aiming to become Sri Lanka but it did not happen and would never happen in the case of Pakistan, saying, “I am still hopeful for striking Staff Level Agreement (SLA)”.
He claimed that the government chose the current account deficit reduction plan well in order to escape a disaster. “We have reversed downward trends of the economy and now the path of stabilization and growth will commence,” he said.
He met with Chambers numerous times over the past few weeks and informed him at each occasion that after seeing you, the confidence had been restored. He was of the opinion that it was necessary to nurture hope in the businessmen.
As a professional, he exhorted the Chartered Accountants to fulfil their responsibility and assist businessmen in regaining faith that the current exceptional and challenging phase could be handled by working together.
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