WASHINGTON: Pakistan and the International Monetary Fund (IMF) have started their technical level talks for an enhanced financial package from the fund, Minister of State for Finance Aisha Ghaus Pasha said.
In Dubai, a senior IMF officials told journalists that the fund has urged Pakistan to bring its current account deficit under control as the country’s new government seeks an increase in the size and duration of the current programme.
In 2019, the IMF approved a $6 billion loan for Pakistan but concerns about the pace of IMF-mandated reforms have delayed its disbursements, although half of this amount has been disbursed.
The IMF completed the 6th review of the programme in February, which led to the disbursement of $1bn. Pakistan has asked the IMF to enhance its bailout package from the remaining $3bn to $5bn.
“Yes, the talks have started,” Ms Pasha said from New York. “We are holding virtual talks, which will continue as the two sides are discussing various aspects of the enhanced package.” The staff level talks will also start soon, she added.
Ms Pasha, who accompanied Finance Minister Miftah Ismail to Washington to participate in the spring meetings of the IMF and the World Banks, leaves for Pakistan on Friday.
Ms Pasha said their talks with IMF officials focused on the subsidies given by the PTI government as the Fund felt those were not sustainable, but they also showed concern about Pakistan’s increasing current account deficit.
In Dubai, Jihad Azour, director of IMF’s Middle East and Central Asia Department, told Reuters they also discussed the country’s huge current account deficit with Pakistani officials in Washington.
Mr Azour said the IMF team will assess the policy priorities of the new government and the economic impact in the context of the war in Ukraine.
Pakistan’s current account deficit ballooned to $13.2 billion in the nine months of its fiscal year from a gap of $275 million a year earlier on the back of soaring oil import costs, the agency reported.