ISLAMABAD: Pakistan is confident it will be able to defend a nearly $1.5 billion fuel and electricity subsidy package during a International Monetary Fund (IMF) programme review that started on Friday, the finance ministry said.
Prime Minister Imran Khan this week announced a cut in fuel and electricity prices despite a steep global rise in the cost of oil, pledging to freeze the new rates for four months with the price differential being covered by the government.
“We are ready to address their (IMF) concerns, if any, about the merits of the relief package,” finance ministry spokesman Muzammil Aslam told Reuters, adding, “We have that fiscal space to fund this money.” The south Asian country had to undertake fiscal tightening measures to pass its last IMF review, which was delayed by months as the government struggled to complete prior actions required by the lender to release $1 billion in February.
“We are already 285 billion rupees above our tax collection target,” he said, adding, “If we have 1,400 billion rupees extra income than last year, and we have unused money, it gives us more flexibility and room to relocate the funds.” “The authorities and the IMF will discuss recent developments, the merits of the recently adopted relief package, and other measures to promote macroeconomic stability, during the upcoming mission,” an IMF official said.
Published in Dawn, March 5th, 2022