IMF demands Pakistan to remove fuel, energy subsidies

IMF demands Pakistan to remove fuel, energy subsidies

KARACHI: The International Monetary Fund (IMF) has demanded Pakistan to remove fuel and energy subsidies for further discussion on bailout package.

Pakistan authorities and a mission of the IMF concluded discussions during May 18 to May 25, 2022 in Doha, Qatar.

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The IMF after the conclusion issued a press release stating that IMF mission led by Nathan Porter held both in-person and virtual discussions in Doha, Qatar with the Pakistani authorities during May 18-25 on policies to secure macroeconomic stability and support sustainable growth in Pakistan.

At the conclusion of the mission, Porter, issued the following statement:

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“The mission has held highly constructive discussions with the Pakistani authorities aimed at reaching an agreement on policies and reforms that would lead to the conclusion of the pending seventh review of the authorities’ reform program, which is supported by an IMF Extended Fund Facility arrangement.

“Considerable progress was made during the mission, including on the need to continue to address high inflation and the elevated fiscal and current account deficits, while ensuring adequate protection for the most vulnerable.

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“In this regard, the further increase in policy rates implemented on May 23 was a welcome step. On the fiscal side, there have been deviations from the policies agreed in the last review, partly reflecting the fuel and power subsidies announced by the authorities in February.

“The team emphasized the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the FY2023 budget, to achieve program objectives.”

The IMF team looks forward to continuing its dialogue and close engagement with Pakistan’s government on policies to ensure macroeconomic stability for the benefit all of Pakistan’s citizens, it added.