The federal government fears a drop in popularity ahead of the general election is causing delays in finalizing an agreement with the IMF. If the program is finalize there can be stability in the country’s economy.
According to media report government and diplomatic officials told that the IMF and Pakistan are still discussing these 7 demands. The IMF wants Pakistan to meet these conditions before providing financial support for economic recovery.
These demands include withdrawal of subsidy on electricity, hike in gas prices, non-blocking of letters of credit.
The official says that the government fears that by following these demands, the prices of essential goods will increase. And the popularity of this government will also decrease before the elections.
The Pakistan Power Regulator has already approved SNGPL and SSGC to increase gas prices by 75%. The approval given by the federal cabinet.
On the other hand, the federal government is waiting for the ninth review of the loan program. Which the previous government signed with the IMF, to release the next tranche of funds to Pakistan which is pending from September 2022.
In August 2022, the IMF approved the seventh and eighth reviews of the bailout program. Under which Pakistan receive more than $1.1 billion, the program agreement signed in 2019.
The IMF official has hinted at continuing to work with Pakistan, but the country has to meet basic conditions first.
An official aware of the talks between Pakistan and the IMF said that the IMF is demanding to fulfill the basic conditions. So that it can send its team to Pakistan, but the finance minister does not want it.
The official added that the IMF wants to increase energy prices and is demanding to ensure implementation of these reforms. But the finance minister is not backing down from his decision.
Officials in Islamabad urged Prime Minister Shehbaz Sharif to intervene before it is too late. Another official said, adding that the program could have been finalized four months ago.
The official said that he personally did not expect much from the caretaker government as Ishaq Dar would not allow the exchange rate to move to the market level.
And if we don’t have the IMF program, the situation cannot return to normal.
Another official in Islamabad said that if waits for the caretaker government to come in to negotiate with the IMF, it will be disastrous for Pakistan