Pakistan’s Finance Ministry spokesman Musammil Aslam confirmed that the IMF would help improve the country’s economic progress and that talks were underway on the 2019 agreement. Pakistan and the IMF have reached an agreement again after 45 days of talks.
The IMF had provided financial assistance in April 2020 to help the country as the corona virus spread in Pakistan and the financial crisis intensified. Pakistan was allocated $ 1.4 billion. Analysts say Pakistan still needs financial help.
In Pakistan, spending is currently higher than revenue. Therefore, for the country to achieve its goal of a balanced budget, it needs to be funded. In addition, the government complied with most of the IMF’s requirements for funding. As part of this, tariffs on electricity and petrol were increased to reduce financial constraints and measures were taken to curb money laundering and corruption. The resulting inflation and soaring prices of essential commodities have tarnished the image of Prime Minister Imran Khan and caused displeasure among the people.
Inflation and protest
Earlier, the Muslim League-Nawaz party had come out against rising inflation in Pakistan. Protesters had pointed out that the government led by Imran Khan was deceiving the people. In June, the Tehreek-e-Insaf and the PML-N said they would not allow the “anti-people budget” to be announced in parliament.
Eighty-five million people in Pakistan are still unemployed. The salaries of 75 million people are less than Rs 18,000. According to the Pakistan Bureau of Statistics (PBS), energy and food prices rose by 10.9 per cent in May.
The Pakistani daily Dawn reported that protests were being held in Islamabad and Rawalpindi against poverty, unemployment and inflation at the call of Pakistan People’s Party (PPP) chairman Bilawal Bhutto Zardari. Food prices in the country have been rising since 2018. The price of a kilogram of vegetable oil has remained at 27% for the last three years. Since October 2018, cooking gas prices have risen by 23 per cent and sugar by 22 per cent. Pulses became dearer by 21 per cent.
The IMF, meanwhile, praised the steps taken by the Pakistani government. The IMF said in a statement that the country’s new moves would lead to 4 per cent economic growth by the end of this year and 4.5 per cent next fiscal.
Pakistan relies on loans from international institutions such as the IMF and the World Bank. But Pakistan is well aware that the US is standing in the way of the IMF’s assistance. This is because Pakistan has rejected US demands for intervention in the Taliban’s occupation of Afghanistan. The Pakistani finance minister had alleged that it was too late for Pakistan to receive IMF assistance.
Pakistan agrees to hold talks with US after realizing US involvement in IMF-Pakistan financial aid deal Moreover, the IMF again offered assistance, citing the collapse of the country.
Meanwhile, the Central Bank of Pakistan has forecast that the country’s economy will grow amid the financial crisis and inflation. Central Bank Governor Reza Bakir has said that Pakistan expects 5 per cent growth by the end of June 2022.
Source: Agencies | Compiled by Bhadra Chandran