Pakistan seeks to ease “tough conditions” with $ 6 billion loan from IMF News

In 2019, Pakistan entered into a $ 6 billion loan deal with the IMF, but the country’s new finance minister said the targets attached to the loan, designed to raise taxes and control government spending, are “tough”.

Pakistan is in talks with the International Monetary Fund (IMF) to try to alleviate “tough conditions” in a $ 6 billion loan, Finance Minister Shaukat Tarin said on Wednesday.

“The goals they have given us are tough … We have talked to them and they are very sympathetic,” said Tarin, about the loan agreed by Pakistan in 2019 in an IMF program.

Pakistan did not want to leave the program, but asked the IMF to give it “a space,” Tarin said in a press conference.

Tarin was appointed the fourth finance minister last month in the two years of Prime Minister Imran Khan’s tenure, the period in which the country’s economy has known.

Based on Tarin’s experience with the IMF’s Long-Term Fund Installation in Pakistan, Tarin said the Khan government is struggling with the stabilization of the already impoverished economy when the coronavirus pandemic hit the country hard.

Pakistan is seeing a record number of deaths and infections in COVID-19, so the country will have to close non-essential businesses and transport for almost two weeks from 5 May. The goal is to have the spread of new coronavirus infections during the Eid al period. -Fitr Muslim Festival, when hundreds of thousands of people will perform crowded prayers.

“It has tough conditions,” Tarin said of the NDF’s benchmarks, including tax collection reforms and measures to raise funds from other areas to overcome the budget deficit.

No immediate response was given at the NDF country office.

Pakistan has raised its electricity prices several times since the start of the NDF program.

“We have no room for tariff increases,” Tarin said, adding that the government will introduce more tax reforms in the next budget.

“Our people are very sick with rising inflation,” he said.

The budget for 2021-22 is just a few weeks away, and the NDF approved a $ 500 million grant in March for budget support, which was delayed by more than a year after a review of the loan program.

The 220 million-strong South Asian country saw consumer price inflation rise 11.1% in April, the 11-month high.

With a 0.4 percent contract with the economy last year, Pakistan has revised its growth projections to 3% for 2020-21. However, the NDF says Pakistan’s economy will expand by just 1.5 per cent, suggesting that the country should lower its expectations for economic growth.