WASHINGTON: The International Monetary Fund (IMF) said it is awaiting an assessment report by the World Bank and UNDP and the economic devastation caused by the unprecedented floods in the country to determine whether How can he help Pakistan?
The global lender also said it would send a mission to Pakistan in November after the annual meetings as part of preparations for the next review. However, the fund said it would wait for the damage estimates currently being done by the World Bank and UNDP.
Director of the IMF’s Middle East and Central Asia Jihad Department said, “We are waiting for the damage estimates that the World Bank and UNDP are doing to see if public finances and the economy and What are its effects on society.” Azor said at a press briefing in Washington on Thursday.
“We are saddened by the loss of life and livelihood in Pakistan due to the floods and we offer, and we reiterate our condolences to the people of Pakistan. The Fund has helped Pakistan a lot in the past. The program with Pakistan which has been expanded and increased in size.”
Azor said the fund has done so to help Pakistan deal with the confluence of shocks triggered by the Covid-19 crisis, where it has provided the country with additional resilience.
“We have recently completed a review in which $1.2 billion has been provided to Pakistan,” he said.
The IMF director said the global lender will look at how it can help Pakistan based on the WB and UNDP assessment. He said the fund would update its numbers and based on discussions with officials, it would also hear about their priorities.
“Subsidies that are targeted to support certain commodities have not been very effective. I would say it has been very regressive,” he said. “In our regional economic outlook, we are again looking at this issue which is showing that this is not the best way to use the very limited financial space that exists.”
Because of this, the fund encourages Pakistan and other countries to end untargeted subsidies that are a waste of resources, he said. He also emphasized that the IMF encourages countries to dedicate these resources to those who need them most.
Reallocating resources to those who need them most is critical given the fact that challenges are mounting and inflation is hurting, the IMF director said. He said that this is not part of the terms of the IMF, but it is needed to provide proper protection to those who need it during inflation.
Decision to cut POL prices in line with IMF conditions?
The IMF director’s remarks came after Pakistan cut the prices of petroleum products on October 1.
The newly appointed Finance Minister Ishaq Dar brought relief to the people of the country by reducing the price of petrol by 12 rupees 63 paise per litre.
Addressing his first press conference as Finance Minister, Dar said that the decision to reduce the prices of petroleum products has been taken after consultation with Prime Minister Shahbaz Sharif.
Dar’s decision to cut POL prices has sparked debate over whether the move is in line with the IMF agreement. Former Finance Minister Miftah Ismail also termed this decision as a ‘reckless’ move.
Amid the controversy, the minister has traveled to Washington to attend IMF meetings seeking to revise the macroeconomic framework.
“Pakistan’s Finance Minister Ishaq Dar will attend the upcoming IMF/World Bank annual meeting,” a senior finance ministry official confirmed to The News on Wednesday.
In an earlier statement, the IMF said the policy commitments made by the Pakistani authorities as part of the seventh and eighth reviews under its support program continue to apply.
