ISLAMABAD: The finance authorities of Pakistan are in a tight situation as the International Monetary Fund (IMF) and Pakistan have not finalised the staff-level agreement for Extended Fund Facility (EFF). Subsequently, the updated version of the federal budget for 2022-23 is still awaiting a green signal from the National Assembly.
Earlier the finance ministry hoped to finalise the staff-level agreement by June 19. But IMF has shown reservations about the budget of Rs9.5 trillion proposed by the government.
According to IMF, the revenue plan would not be sufficient to fulfill the target of Rs7 trillion. An official from the ministry said that though Pakistan had not received the Memorandum of Economic & Financial Policies (MEFP) from IMF, the two parties will soon conclude the deal.
The presented budget has to be passed from the National Assembly by June 28 for legal implementation by July 1. For this purpose, an agreement has to be reached with the IMF to protect the measures agreed upon.
HELP FROM THE UNITED STATES
According to a report by Dawn, the United States has assured Pakistan that they will help finalise negotiations with the IMF. Pakistan has been trying to seek support from Washington to renew the EFF. Since the US holds a significant share in IMF, the country could influence their decision.
Earlier, Pakistan had a 39-month agreement in 2019, but after disbursing $3 billion, the fund stopped as the PTI government could not fulfill the agreed terms. On Saturday, Ambassador of Pakistan to the US Masood Khan and Assistant US Trade Representative (USTR) Christopher Wilson, had a meeting. Both discussed future investment plans and trade relations between the two countries.