Daily Times

Although “few remaining points are yet to be finalized,” according to the International Monetary Fund, Pakistan has made “substantial progress” in meeting policy commitments necessary to unlock the billions of dollars in loans the country needs to avoid defaulting.

In order to restart a $6.5 billion IMF loan package, Pakistan has implemented stringent measures such as raising taxes and energy costs and allowing its currency to depreciate. The money will help a nation still recovering from last year’s devastating floods and help the economy recover in time for this year’s elections.

“A staff-level agreement will follow once the few remaining points are closed,” said Esther Perez Ruiz, the IMF’s resident representative for Pakistan, adding “Ensuring there is sufficient financing to support the authorities in the implementation of their policy agenda is the paramount priority.”

The IMF wanted to see countries complete their commitments to help Pakistan shore up its funds before approving the bailout package, according to Finance Minister Ishaq Dar’s comments from last week. By June, Pakistan must pay back about $3 billion in debt, and another $4 billion is anticipated to be rolled over.

In a statement, Ruiz claimed that the lender had not been informed of the government’s plan to increase fuel costs for more affluent drivers in order to pay for a subsidy for those with lower incomes.

“Fund staff are seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities,” she said.

EFF is a financial arrangement between the IMF and a member country, providing economic support and policy guidance over an extended period. The ninth EFF review for Pakistan is of particular significance as it will determine the release of the next tranche of funding.