IMF, Pakistan resume talks

The International Monetary Fund (IMF) and Pakistan resumed their talks on Monday, with Islamabad hoping that these virtual discussions lead to a deal that eases up ever-increasing pressure on the country’s ailing economy.

In Islamabad, Finance Secretary Hamed Yaqoob Sheikh told Reuters the “duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest”.

Pakistan held 10 days of intensive talks with an IMF delegation in Islamabad — from Jan 31 to February 9 — but could not reach a deal, reports Dawn.

The IMF, however, said in an earlier statement that both sides have agreed to stay engaged and “virtual discussions will continue in the coming days to finalize the implementation details” of the policies discussed in Islamabad.

The talks in Islamabad focused on the ninth review of an IMF Extended Fund Facility (EFF) arrangement with Pakistan, concluded in 2019.

The IMF appreciated Prime Minister Shehbaz Sharif’s commitment to implement policies needed to safeguard macroeconomic stability and described the discussions as constructive.

The IMF also acknowledged they made “considerable progress … on policy measures to address domestic and external imbalances”. The Fund highlighted the key priorities discussed in Islamabad, which included increasing revenue, reducing untargeted subsidies, and scaling up social protection programmes.

Diplomatic observers in Washington say the IMF wants Pakistan to start implementing the suggested measures. The sources point out that the IMF statement issued after the Islamabad talks underlined this issue as well.

“The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development,” the IMF said.