ISLAMABAD: The risks associated with the IMF’s short-term $3 billion Standby Arrangement (SBA) program will multiply with the possibility of extending the caretaker setup period after the approval of the 7th Population and Housing Census. .
In the wake of the delimitation exercise that began after the approval of the CCI and the official gazette notification of the first digital population census, the polls are likely to be delayed by more than three months.
The delimitation exercise takes four months and another two months to complete the electoral process.
Under the current circumstances, the caretaker government may have to extend its tenure by at least six months to complete the process of political transition.
Meanwhile, the Cabinet Committee on Energy (CCOE) has approved the revised Circular Debt Management Plan (CDMP) which will be shared with the IMF after approval from the Federal Cabinet.
Under the revised CDMP, it is envisaged that quarterly tariff adjustments and fuel adjustments will be collected from the consumers in time after the increase in the baseline tariff. There will be no untargeted subsidy for any sector.
When contacted, a top government official said the CCOE has given its approval and it will be shared with the IMF after Cabinet approval.
When asked if the revised CDMP was planned to be shared with the IMF by the end of July 2023, the official said he had not missed any major deadline and would share it soon. will be done.
It remains to be seen how the IMF will respond to the revised targets on the revised CDMP as the targets are first agreed upon and then implemented within the limits set for the current fiscal year. Will make sure to limit.
Now on the IMF front, when the $3 billion SBA program was designed, it was envisioned that it would be completed under three different administrations.
The first tranche of $1.2 billion was already released under the Pakistan Democratic Movement (PDM)-led government. It was envisaged that the first review would be conducted on the basis of data from various sectors of the economy for the first quarter (July-September), with the possibility that the Fund would conduct its review mission in Islamabad in the third week of October. Will send.
If all targets are met, the IMF’s board may consider approving a second tranche of $700 million in December 2023. It was also envisaged that the second review would be conducted in February 2024 and the SBA program would be completed in March/April 2024. .
With the possibility of extending the period of the custodial setup, the custodial government may be responsible for implementing all structural standards, performance criteria and indicative targets and all key targets set by the IMF mission. Can be closely monitored. .
Full implementation of SBA’s IMF program is necessary to graduate from the ongoing program and then qualify for the Fund’s second medium-term program after March/April 2024 to address Pakistan’s external debt servicing risks. . .
