ISLAMABAD – US Ambassador Donald Blome on Tuesday met Pakistan’s Finance Minister Muhammad Aurangzeb and assured him of support in completion of the ongoing $3 billion International Monetary Fund (IMF) loan programme.
The statement about Ambassador Blome’s meeting with Finance Minister Aurangzeb has been issued by the US Embassy in Islamabad amid talks between Pakistan and the IMF for the final review of the loan programme, which Islamabad secured last year.
As Pakistan claims it has met all the targets set by the global lender, a successful review will bring Pakistan the remaining $1.1 billion.
According to the US Embassy, Ambassador Blome discussed US cooperation and support for Pakistan’s efforts to meet its reform targets, including improvement of the tax administration and investment climate in the South Asian country. “Ambassador Blome noted the US government’s support for Pakistan’s work with the IMF to complete its current Stand-By Arrangement (SBA),” reads the statement issued by the embassy.
The IMF review was expected to conclude on Monday, but the visiting IMF delegation has reportedly decided to extend the review by a day due to incomplete agenda on both sides. “The review agenda couldn’t be completed in the scheduled period, therefore the mission has extended it for a day for now,” an unnamed official said. “The letter of intent and staff-level agreement will be discussed tomorrow [Tuesday] now,” he added.
Pakistan has shown its interest in securing a new loan under the Extended Fund Facility (EFF) programme. On Monday, Pakistani financial authorities briefed the IMF mission on the country’s annual taxation targets, ways to abolish subsidies, digitization of the tax system and expansion in the tax net.
The official said, “At the moment, Pakistan has been lagging on two fronts that are digitization of the taxation and bringing over 3 million retailers in the tax net.” He added, “The FBR has signed a memorandum this week for the digitization while the work on bringing the retailers into the tax net is underway.”
Pakistan secured the $3 billion IMF programme in last June after it narrowly escaped a sovereign default. Its economy has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23 percent, policy interest rates at 22 percent and record local currency depreciation triggered by massive corruption and financial mismanagement in the country.
