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IMF makes removal of fuel, energy subsidies conditional for revival of the rescue package

International Monetary Fund (IMF) on Wednesday stressed to have updated its state of “removal of fuel and energy subsidies” to achieve the goals of the program.

Earlier this week, Finance Minister Miftah Ismail said he would inform the IMF that the fuel and energy subsidies introduced by the previous PTI government — could not be reversed, as “the nation cannot bear it.”

But in in a statement released earlier today, the IMF said it had “emphasized the urgent of specific policy actions, including in context of elimination of fuel and energy subsidies and fiscal year 2023 budgetachieve program goals”.

According to the IMF, mission had “very constructive discussions” with The Pakistani authorities were seeking an agreement on policies and reforms that lead to the conclusion of forthcoming seventh review of government reform program.

It spoke of significant progress was made on time mission including on in need continue to fight high inflation and increased fiscal and current account deficit, while ensuring adequate protection for the most vulnerable.

“In this regard, a further increase in policy rates implemented on May 23 was long awaited step. On the fiscal side, deviations from the policy agreed in in last reviewpartially reflecting fuel and power subsidies announced authorities in February”.

Meanwhile, Foreign Minister Bilawal Bhutto-Zardari said the current bailout deal between Pakistan and the IMF is “outdated” given the amount of global crises.

“This deal with the IMF is not based on ground realities, and the context is absolutely changed since the conclusion of this deal,” Bilawal told Reuters. on aside of World Economic Forum.

He said it would be justified for Pakistan will sue the IMF in this case in [current talks].

“This deal was done before Covid. This is an agreement with consequences up to Afghanistan. This is a pre-Ukrainian crisis deal. This is a pre-inflationary deal,” Foreign Minister Bilawal said.

Calling the deal “obsolete”, he said it would be unfair and unrealistic to expect a developing country like Pakistan to resolve geopolitical issues within the framework current agreements.

“We must deal with IMF and we must keep Pakistan’s word international community … However, going forward is very legal for Pakistan will come forward on its side,” Bilawal said.

Recently-elected government started negotiations with fund a week ago over release of tranche of US$1 billion under the Enhanced Funding Facility, progress has been slowed down by concerns about pace of economic reforms in the country.

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Sandra Loyd
Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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