Pakistan receives MEFP from IMF for 7th and 8th review: Miftah

MEFP key step to indicate the two parties have reached agreement

Pakistan has received combined economic and financial targets for the seventh and eighth reviews of its International Monetary Fund bailout programme, the finance minister said on Tuesday.

On Twitter, the finance minister, Miftah Ismail, said the government had received the lender’s Memorandum of Economic and Financial Policies (MEFP) for both reviews, following meetings last week.

Early this morning, the Government of Pakistan has received an MEFP from the IMF for combined 7th and 8th reviews.

— Miftah Ismail (@MiftahIsmail) June 28, 2022

The MEFP is a key step to indicate that the two parties have reached an agreement.

The government wants to conclude an agreement with the international lender for the revival of the $6 billion programme before the approval of the federal budget for the upcoming fiscal year 2022-23 – which needs to be done by June 28.

The finance ministry said in a statement on Sunday that the IMF would hand over the economic and financial policy for the renewed deal, providing an economic relief package to Pakistan. “The Pak-IMF deal providing Pakistan with the $1 billion loans will be sealed by tomorrow (Monday) as IMF plans to hand over Pakistan the economic and financial policy,” the statement had said.

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Finance Minister Miftah Ismail had told the National Assembly (NA) that although the country is rife with negative sentiments expressed by many financial quarters, it looks very likely that the restoration of the IMF programme is in the offing. He had said that keeping in view the erratic policies followed by successive governments in respect of managing the economy, almost all international financial institutions have become wary while dealing with Pakistan.

Pakistan is also seeking an increase of $2 billion in the IMF programme and wants its tenure to be extended by a year. During the week ending on June 26, the government revised its budgetary targets by reversing purposed relief for the salaried individuals and imposing a super tax on 13 industries.

On June 22, Pakistan announced a ‘broad agreement’ with the IMF on the next year’s budget that has seen its size increase to Rs9.9 trillion, as the government agreed to reintroduce tax on people earning up to Rs100,000 and petroleum levy from July 1.

The two sides had decided to gradually impose Rs50 per litre petroleum levy -- the first tranche of Rs10 per litre from July and then Rs5 per litre from August onwards until it reaches the maximum threshold of Rs50 per litre by March 2023.