Raise revenue, give subsidies only to needy: IMF to Pakistan

Islamabad, February 20

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, has said the funding agency has asked Pakistan to take steps to be able to function as a country and not get into a dangerous place where it needs debt restructuring, The News International, a Pakistan daily, reported.

Take steps to function as country

The IMF has asked Pakistan to take steps to be able to function as a country and not get into a dangerous place where it needs debt restructuring. Kristalina Georgieva, IMF Managing Director

“We are emphasising two things — number one, raising tax revenues, as those who are making good money in public or private sectors, need to contribute to the economy, and, number two, a fairer distribution of precious resources by taking subsidies away from people who don’t need them. It shouldn’t be that the wealthy benefit from subsidies. It should be the poor [who] benefit from them,” she said, as quoted by The News International newspaper organisation.

Current account deficit shrinks 90.2% in Jan

“My heart goes out to the people of Pakistan. They have been devastated by the floods that affected one-third of the population of the country,” IMF’s Georgieva said in an interview with an international broadcaster on Sunday.

“And there, we are very clear. We want the poor people of Pakistan to be protected,” she added.

Islam Khabar recently reported that Pakistan’s historic rise in petrol price and the International Monetary Fund’s delay in sending the required loan is pushing the country’s economy into a “tailspin”.

Pakistan’s current account deficit shrank 90.2 per cent to USD 0.24 billion in January from USD 2.47 billion in the same month last year, the data shared by the State Bank of Pakistan showed.

Last week, Pakistan hiked the prices of petrol to Pakistani Rupees (Rs) 272 per litre to appease the IMF for unlocking the critical loan tranche, reported Geo News.

The petrol price has been increased to Rs 272 per litre after an increase of Rs 22.20, a press release from the Finance Division stated, mentioning that the surge has taken place due to the devaluation of Pakistani rupees against the dollar, as per the Geo News report.

Pakistan is in panic after the IMF team that came to negotiate the details of a bailout package left without reaching a final agreement. This even after Finance Minister Ishaq Dar and Prime Minister Shehbaz Sharif agreed to all the preconditions for the bailout package. — Agencies