Policy commitments by Pakistan continue to apply: IMF

Says policy discussions to begin after availability of damage assessment report

The resident representative of the International Monetary Fund (IMF) has said that policy commitments made by Pakistani authorities to resume the support programme continue to apply.

“Policy commitments made by the Pakistani authorities as part of the seventh and eighth review under their IMF-support program continue to apply,” IMF representative in Islamabad Esther Pérez Ruiz told Reuters on Monday.

She said policy discussions, including how to target support to those affected by the floods while maintaining macroeconomic stability, will commence in coming weeks after the damage assessment report becomes available. The IMF official made the comments in response to a question if the recent reduction in fuel prices had been discussed with the lender. The statement came after Finance Minister Ishaq Dar, who took over the reign from his party member Miftah Ismail as the finance czar last week, reduced the prices of petroleum products for the next fortnight by around five per cent – reversing a policy of raising prices monthly through added levies to ensure enhanced revenues as agreed with the IMF.

Dar said imposing additional levies was not justified as the country was struggling to deal with catastrophic floods that have killed more than 1,600 people and inflicted at least $30 billion in damages.

“I have been dealing with the IMF for the last 25 years; I will deal with it,” he said, referring to any potential reservations by the lender. Dar’s statement had come in response to his predecessor’s criticism, who termed the move to slash fuel prices by reducing levy sans IMF approval “reckless”.

Responding, Dar said: “Maybe Miftah sahab was comfortable (in burdening the public). But I’ve been dealing with the IMF for 25 years. I’m the only humble person who’s completed an IMF programme,” he said during an interview with a private television channel.

Dar said Ismail should simply call him to seek clarity instead of making public statements. “Prime Minister Shehbaz Sharif told me that during the UNGA session, where Miftah was also present, he had proposed IMF officials freeze taxes to which they did not refuse.”

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