ISLAMABAD: The International Monetary Fund (IMF) is looking to revert back to a three-month review schedule of the $7 billion bailout package after seeing early slippages, but the Pakistani authorities insist that no final decision has so far been taken.
The issue of returning to the quarterly reviews surfaced during an unscheduled visit of the IMF mission that had to rush to Islamabad to keep the program on track.
The finance ministry is also struggling to keep the provinces on the right track, ministry sources said.
They said that a quarterly review would help in constant monitoring of about 40 conditions agreed under the $7 billion deal. However, the officials told that there was no final decision on the issue of the biannual and the quarterly reviews.
About six weeks ago, the IMF board had approved the $7 billion deal and released the $1.1 billion upfront. The remaining amount of around $6 billion will be distributed in six equal tranches, subject to the successful completion of half-yearly reviews.
The completion and the approval of the first review was scheduled for March next year but due to multiple challenges on the fiscal, taxation and external financing fronts, the mission arrived before time. The last Extended Fund Facility (EEF) of the 2019-22 deal was also based on the quarterly reviews.
In case of the quarterly reviews, the IMF can ensure strong implementation by keeping a close check on the government, the sources said. The quarterly reviews would also strengthen the hands of the Ministry of Finance to ensure monitoring of the 40 conditions, they added.
IMF Mission took the first round of briefings from various ministries, while Mission Chief Nathan Porter held opening talks with Finance Minister Muhammad Aurangzeb and State Bank of Pakistan (SBP) Governor Jameel Ahmad on Tuesday.
The IMF’s new Resident Representative to Pakistan Mahir Bicini also attended the opening meeting. The finance minister hosted a luncheon in honour of the outgoing representative Esther Perez. The finance ministry did not issue a press statement after the opening session.
The IMF held different rounds of discussions on the issues of Federal Board of Revenue’s (FBR) performance, reliability of the power sector statistics and performance of the macroeconomic targets. An important round was also held on the status of the implementation of the National Fiscal Pact.
The FBR gave an overview of its performance during the first quarter. The IMF was told that the three-month shortfall of Rs90 billion was because the macroeconomic assumptions went off the mark.
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