Sources close to Finance Minister Abdul Hafeez Sheikh told on that Pakistan was progressing towards implementation of economic reforms committed to with the IMF. “However, there was no urgency to seek immediate release of next tranche under the Stand-By Arrangement (SBA) loan programme of the IMF,” the sources added.
According to the sources, IMF has appreciated steps that the government had taken in line with the agreed reforms including new taxation measures through Presidential Ordinances. “We haven’t yet received the Letter of Comfort (LOC) of the IMF after latest taxation measures,” the sources said adding, “The IMF was most likely to issue it very soon.”
To a question the sources said, the government was struggling with the economic difficulties. “We would certainly subsidize petroleum prizes in the wake of international crude oil’s hike but only after having enough fiscal space required for this measure,” the sources added.
According to the sources, the government could not undermine its political compulsions to share the burden of price hike with the public. “But the politics cannot prevail over all economic decisions,” the sources added.
The sources were of the view that Pakistan needed to maintain a certain level of confidence with the IMF since the Fund’s viewpoint always prompts not only investors’ mood but also the sentiment of bilateral as well as multilateral financiers. Therefore healthy engagement with the IMF was to the advantage of Pakistan in addition to foreign currency inflows.
Elaborating the state of the economy, the sources said, foreign exchange reserves reaching the record high level, encouraging trend in exports, and constantly rising remittances have enabled Pakistan to manage its external payments on its own for the time being at least.