The International Monetary Fund said that Pakistan has made a lot of progress toward meeting policy commitments needed to unlock billions of dollars in loans that the country needs to avoid a default.
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Pakistan has taken tough measures, including increasing taxes and energy prices, and allowing its currency to weaken to restart a $6.5 billion IMF loan package. The funds will give some relief for a nation that is still reeling from last year's devastating floods and help to get the economy out of a crisis ahead of elections this year.
Once the few remaining points are completed, a staff-level agreement will be reached, said Esther Perez Ruiz, the IMF's resident representative for Pakistan. It is important that there is enough funding to support the authorities in the implementation of their policy agenda. Finance Minister Ishaq Dar said last week that the IMF wanted to see countries finalize commitments they have made to help Pakistan shore up its funds before signing off on the bailout package. Pakistan needs to repay $3 billion of debt by June, while $4 billion is expected to be rolled over.
Ruiz said the lender wasn't consulted on the plan to raise fuel prices for wealthier motorists to finance a subsidy for less-income people.
She said that fund staff are looking for more details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will discuss these elements with the authorities.
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