Pakistan signed a b 2 billion agreement with the IMF in 2019, but the country’s new finance minister said the goals associated with raising taxes and adding government spending were “tough”.
On Wednesday, Finance Minister Shawkat Tarin said Pakistan was in talks with the International Monetary Fund (IMF) to ease the “difficult situation” with a 6 6 billion loan.
“The target they have given us is tough … we have talked to them and they are very sympathetic,” Tarin said, referring to an agreed loan in an IMF program that entered Pakistan in 2016.
Pakistan did not want to give up the program but asked the IMF to “give us some space”, Tarin told a news conference.
In just two years of Prime Minister Imran Khan’s government, Tarin was appointed the fourth finance minister, during which time the country’s economy has shrunk.
Elaborating on Pakistan’s experience with the increased funding of the IMF, Tarin said Khan’s government was already struggling to stabilize the poor economy when the coronavirus epidemic hit the country hard.
Pakistan is seeing a record number of deaths and infections of Kovid-19 and so the country aims to stop unnecessary trade and transportation for about two weeks starting May 5 with the aim of spreading new coronavirus infections during the Al-Fitr Muslim festival. Thousands of people will perform mass prayers.
“This is a very difficult situation,” Tarin said of the IMF benchmark, which includes tax reform reforms to meet budget deficits and measures to raise money from other regions.
There was no immediate response from the IMF’s domestic office.
Pakistan has raised electricity prices several times since the start of the IMF program.
“We have no room for tariff increases,” Tarin said, adding that the government was going to introduce more tax reforms in the next budget.
“Our people are sick of rising inflation,” he said.
With just a few weeks left in the 2021-22 budget, the IMF approved a ির 500 million disbursement in March to support the budget, ending a review of the more than one-year delayed loan program in March.
In a country of 220 million people in South Asia, consumer price inflation rose to 11.1 percent in April, the highest in 11 months.
With the economy down 0.4 percent last year, Pakistan has raised its growth forecast for 2020-21 to 3 percent. The IMF, however, said that Pakistan’s economy could only expand by 1.5 per cent, which should lower its economic growth expectations.