KARACHI: Pakistani authorities are expecting International Monetary Fund (IMF) to share draft memorandum of economic and financial policies (MEFP) with them today despite differences over external financing needs and power sector losses.

Pakistan and IMF were scheduled to hold parleys from January 31 to February 9, 2023 for making efforts to strike staff-level agreement for completion of ninth review and release of the $ 1 billion tranche under $ 6.5 billion Extended Fund Facility (EFF) signed by Pakistan Tehreek-e-Insaf government in 2019.

Shehbaz Sharif-led government is in Catch-22 situation due to tough conditions set by lender and political cost of these measures in an election year.

Keeping last reviews in view, both sides took much time for striking staff-level agreement even after getting draft MEFP document and nine tables. But, according to Pakistani authorities, now IMF mission had changed its working style they will finalise agreement first and then share MEFP. If consensus cannot be developed today, IMF mission might extend its stay or announce continuing parleys through online meetings from Washington DC.

Sources said IMF had raised doubts about shrinking dollar inflows, so without securing confirmation from all avenues of multilateral, bilateral and commercial banks, Fund delegation could not fulfil gross external financing needs of $ 9 billion to $ 12 billion without securing confirmation. This level of external financing is required in remaining period of five months till June 30, 2023, if reserves held by SBP remained at around $ 3 billion.

IMF expressed its unease over projections made by Ministry of Finance over external financing inflows from multilateral, bilateral creditors and in shape of commercial loans.

Published in The Daily National Courier, February, 10 2023

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