Possible deal with IMF still not in the offing: Tarin

Former finance minister Shaukat Tarin on Wednesday countered the government’s upbeat portrayals of a possible deal with the International Monetary Fund (IMF) in the offing, saying a final agreement with the money lender was still weeks away.

Speaking to the media, the PTI leader said while he himself prayed for a deal with the IMF that doesn’t burden the poor, the matter was currently a work in progress.

Tarin’s statement comes amid the reports that the country stood on the precipice of a final understanding with the global money lender, with Finance Minister Miftah Ismail expressing confidence over a possible deal, which he said had finally appeared on the horizon.

He pointed out that according to the statement of IMF itself, the deal was still in progress and a memorandum of economic and financial policy (MEFP) will be given on Friday. “When that has not been received, how can it be said that an agreement has been reached?”

The MEFP, he continued, is an extensive document and will be subject to threadbare deliberations. He explained that the process further entailed signatures on a technical agreement following which the document will land at the desk of IMF’s board in Washington.

The deal would materialise by July-end, he added.

Lashing out at the government for the economic crisis, Tarin said that the coalition parties walked back on their narratives while giving contradictory statements within a space of a few weeks, an ill-advised which he said affected the government's credibility with the financial market.

Read ‘Broad agreement’ reached with IMF to end uncertainty

Furthermore, he warned that the country was well on its way to a "serious economic crisis".

"They have gone back to purana (old) Pakistan. This means we will never go towards value added tax (VAT) mode. They have protected retailers in a massive way."

Urging the government to expand its tax base, Tarin cast doubts on the government’s word to the IMF that it would collect more than Rs400bn in taxes. He expressed fears that the withdrawal of the petrol levy and unprecedented hike in prices would unleash a storm of inflation.

He predicted that inflation would rise to 35-40% while economic growth would be between 1-2%
Earlier, Finance Minister Miftah Ismail told The Express Tribune that he was confident about the prospects of sealing a deal with the IMF for the revival of the $6 billion bailout package in a day or so, after the government considered increasing the tax target to around Rs7.45 trillion and adjusted some expenses.
The finance minister said that the fiscal framework with the IMF had almost been finalised.

“God willing, the IMF deal will be finalised in a day or so,” he said while responding to a question.

“The understanding on the fiscal framework should give a positive signal to the markets and we should also expect a positive statement from the IMF in a couple of days,” the minister said after attending a meeting of the Senate Standing Committee on Finance.

The minister said that the monetary targets would now be agreed with the IMF by the central bank, which would eventually pave the way for reaching an understanding on the MEFP.