The second half-yearly economic review between Pakistan and the International Monetary Fund (IMF) ended without agreement.
A joint communiqué on the second half-yearly economic review talks between Pakistan and the IMF has been released. Implementation of the conditions under the loan programme was described as strong. Both sides agreed to continue policy discussions.
Despite progress in discussions, both sides could not reached a staff-level deal. The IMF has once again urged Pakistan to implement further measures, as a staff-level agreement could not be reached between the two sides.
The IMF stressed the need to maintain fiscal discipline and extend support to flood-affected communities. It recommended the continuation of a tight monetary policy to keep inflation within target. Agreement was reached on regular tariff adjustments and reforms to restore the energy sector. Discussions also covered reducing the size of state-owned entities and improving transparency.
Officials at the Ministry of Finance remain hopeful about the successful completion of the second review of the $7 billion loan programme. According to the officials, talks with the IMF since September 25 have been constructive and positive, and virtual discussions will continue.
Sources revealed that both sides agreed to end tax-free car import schemes. The baggage and gift schemes will be abolished, and the transfer of residence scheme is to be further tightened. The commercial import of five-year-old used vehicles will be allowed under certain conditions. The IMF has instructed Pakistan to obtain approval of stricter conditions through the Economic Coordination Committee later this month.
According to sources, differences persist between the government and the IMF regarding the release of the governance and corruption report. A task force has submitted various recommendations on the matter. These included mandatory disclosure of assets by government officers in grades 17 to 22 and their families.
Proposed measures also involve amendments to the Civil Servants Act, Election Act, NAB Ordinance and FIA Act, with suggestions to enhance accountability, investigative capacity and anti-corruption awareness.
