IMF sticks to its guns on staff-level agreement
Pakistan emphatically requested the International Monetary Fund (IMF) on Wednesday to show some flexibility and sign the staff-level agreement, however, it could not get a date despite Islamabad’s growing concerns about the fallout of a worsening economic crisis.
The request was made by Finance Minister Ishaq Dar in a virtual meeting with Jihad Azour, the IMF’s director for the Middle East and Central Asia Department. However, the minister could not get the desired result, as the IMF once again raised the issue of petrol subsidy and possible fiscal leakages as a result of the implementation of the subsidy plan.
The two sides discussed the progress made on the IMF programme, particularly the talks held with the IMF mission during its visit to Pakistan, and the implementation of prior actions, according to the press statement issued by the finance ministry.
“The minister urges the IMF not to raise the issue of petrol subsidy, and object to the IMF’s approach of seeking clarifications about the schemes announced by Prime Minister Shehbaz Sharif,” said sources.
Energy tariff up by 46 paisas on fuel adjustment
In another unfortunate news for the inflation-hit people of Pakistan, the cost of electricity has been increased by 46 paises per unit under the quarterly fuel adjustment. The electricity tariff has been hiked under the second quarter of the current financial year. The National Electric Power Regulatory Authority (Nepra) has informed the federal government about its decision. According to the power regulator, an additional burden of more than Rs15.45 billion would be imposed on electricity consumers.
It added that electricity consumers would have to make additional payments in three months — in their April May and June bills.
The increase in the electricity tariff will be applicable to all the consumer categories except lifeline ones and K-Electric users.
On March 31, the federal government gave the nod to Nepra’s approval for imposing up to Rs3.23 per unit surcharge on electricity consumers throughout the country with effect from July 1.
IB seeks Pkr8.42 mn grant from govt
The Economic Coordination Committee (ECC) of the cabinet will meet on Thursday (last) morning to review the request of the Intelligence Bureau (IB) for over Rs8.42 million in technical supplementary grant for the current fiscal year.
Finance Minister Ishaq Dar has convened the ECC meeting which would take up a six-point agenda. The committee is expected to approve the IB’s request for the technical supplementary grant.
Other agenda items include the approval of the proposal for declaring Angoor Ada as an authorised land route station for the overland trade through Afghanistan and Central Asian countries.
The meeting is also expected to approve the financing facility for the industries Ministry for electric bikes and electric rickshaws and the grant of a technical supplementary grant of Rs2.6 million to the housing and works ministry.
Approval would also be given to provide technical supplementary grant in the form of Pakistani rupees from $1 million committed by the SAARC Development Fund for the National Health Services Regulation and Coordination.
Gov in breach of all fiscal targets
An International Monetary Fund (IMF) report has revealed that Pakistan will miss the fiscal and debt reduction targets of this fiscal year and the situation will become worse in the next fiscal year with a budget deficit peaking at 8.3 percent of the size of the nation’s economy.
The Fiscal Monitor report, released on the side-lines of the IMF Spring Meetings, showed that Pakistan will miss all targets related to the reduction of the budget deficit, gross public debt, and expenditures and increasing revenues during FY2022-23 and FY2023-24.
Compared to an eight-month-old assessment of booking a budget deficit of 4.7 percent of the GDP, the Fiscal Monitor report showed that the deficit may widen to as high as 6.8 percent by June this year. There is a slippage of 2.1 percent of the GDP or Rs1.8 trillion, underscoring the poor performance of the incumbent government.
Pkr recovers partially as dollar demand dips
Pakistani rupee made a partial recovery of 0.63 percent, or Rs1.81, on Wednesday and closed at Rs286.62 against the US dollar in inter-bank market.
Traders displayed anxiety over prolonged delay in revival of the International Monetary Fund’s (IMF) $6.5 billion loan programme. The disquiet put the rupee’s value in jeopardy as the currency hit a record low of Rs288.43 against the greenback on Tuesday, according to the central bank data.
Exchange Companies Association of Pakistan (ECAP) Secretary General Zafar Paracha said that the rupee made a partial recovery after hitting an all-time low a day ago.
There was a lull in the market since currency traders were in a holiday mood. Because of the low activity, the currency market saw no big demand for US dollars, enabling the rupee to recover some ground.
Paracha said that traders demanded low prices for the greenback following improvement in its supply compared to consumer demand.
For country to prosper, it must invest in its children
Pakistan remains one of the more important countries in the region, occupying a very strategic location overlooking the Gulf and the Arabian Sea, and abutting Afghanistan, Iran, China, and India.
It is fifth largest in the world in terms of population, though that may be seen as a vulnerability too. And it is a nuclear power, though aimed largely at deterring neighbouring India.
Until recently, Pakistan had a middle class of around 50 million people. But poor governance and self-serving elites have deprived it of the chance of becoming an upper-middle income country.
Over the years, its policymakers appear to have relied more on hope than well-designed and efficiently implemented policies. They have used their positions to craft policies that added to their own wealth, rather than the common wealth.