The IMF has confirmed that Saudi Arabia will give Pakistan $2 billion, funding from the United Arab Emirates is also awaited and an additional $1 billion in deposits is eyed.
Subsidy on fuel is an obstacle to the agreement with the IMF, according to the sources, the cheap petrol proposal will have to be terminated, the government has not yet prepared a strategy. A staff level agreement will be concluded with the IMF.
The World Bank, while releasing its report on Pakistan’s development, recent economic growth and related concerns, said that if Pakistan wants to reduce expenditure, it should end subsidies on electricity and petrol.
Pakistan can achieve sustainable growth only through economic reforms, in addition to maintaining dual ministries and departments, completing provincial projects with federal resources is causing a loss of 800 billion rupees annually.
After the possibility of getting an additional two billion dollars in the form of deposits from Saudi Arabia, Pakistan is now waiting for a response from the United Arab Emirates regarding getting another one billion dollars, so that a staff level agreement can be reached with the IMF.
Speaking to The News, senior government officials said that the IMF has told the Pakistani authorities that they have received an assurance of two billion dollars from Saudi Arabia and the IMF is satisfied with this assurance.
It is hoped that the Saudi authorities will make an official announcement on the occasion of Prime Minister Shahbaz Sharif’s visit to Saudi Arabia. The Pakistani ambassador to Saudi Arabia said that Saudi Arabia has always helped Pakistan in difficult situations and good news will come out soon.
A deal with the IMF will be finalized after the UAE receives an additional $1 billion in deposits, with one more hurdle still to be overcome.
After consultation with the Prime Minister’s Office, the Ministry of Petroleum had announced that fuel subsidy would be given to motorcyclists and cars up to 800 cc. Currently, this proposal will have to be scrapped. Not prepared.
It is expected that Finance Minister Ishaq Dar will hold talks with IMF and World Bank officials in the future, but the final date of the talks has not been revealed so far.
How the negotiations between Pakistan and the IMF regarding the Expansion Fund Facility are progressing even though the 9th review has been completed while the expansion program is ending on June 30, 2023.
The program will be extended for three to six months, but so far there has been no talk in this regard, the World Bank, while releasing its report on Pakistan’s development, recent economic growth and related concerns, has said that the traditional regressive subsidies. Pakistan can achieve ‘sustainable growth’ only through economic reforms by reducing supply and reducing expenditure.
According to an estimate of the World Bank, in addition to maintaining the same dual ministries and departments, the completion of provincial projects with resources under the federation is causing a loss of 800 billion rupees annually, according to which the Higher Education Commission has been maintained. While provincial projects are being completed from the Public Sector Development Program which is allocated from the federal budget.
According to World Bank economists, the said loss is one percent of the GDP, even after the transfer of powers to the provinces under the Eighteenth Constitutional Amendment, the losses are estimated at 320 billion rupees on an annual basis.
70 billion annually by continuing HEC and 315 billion annually by completing provincial projects under PSDP is estimated.
70% of the expenses in the form of salaries, pensions, expenses, compensation and interest payments of the employees, despite the eighteenth constitutional amendment, often the expenses which are of a provincial nature are also borne by the federation.
The World Bank report called for austerity to reduce government staff and operational costs, freeze top- and middle-level hiring and wages, while modestly raising wages at lower levels as needed and reducing pension costs through reforms.