IMF asked Pakistan to show how it would fund $1.5 billion subsidy program

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The International Monetary Fund (IMF) has asked Pakistan to explain how it will finance a $1.5 billion grant package announced by Prime Minister Imran Khan, Finance Minister Shaukat Tarin said on Sunday.

“There is no problem. We have given them details of where the funds are coming from,” Tarin said, adding that the IMF wanted details of the resources needed to finance the fuel and electricity subsidy, that Pakistan has frozen for the next four months. until the new budget.

The IMF began the seventh review of the $6 billion bailout package agreed with Pakistan in 2019, and Tarin said he would have a final meeting with the lender on Tuesday.

The IMF has asked that it needs to see the SOEs’ dividend deals as well as details of the reserve funds the central government will get from the provinces.

“We did our homework,” Tarin said.

Some of the grant money would also come from above-target revenue Pakistan was receiving in this financial year, he had previously said.

Earlier this month, Tarin said revenue would reach 6.1 trillion Pakistani rupees ($34.2 billion), against a target of 5.8 trillion rupees. Embattled Khan, faced with a no-confidence decision aimed at ousting him from office by opposition parties, had announced lower gasoline and electricity prices despite a sharp rise in the global oil market.

The South Asian country had to take fiscal tightening measures to pass its latest IMF review, which was delayed for months as the government struggled to complete the prior steps required by the lender to unblock $1 billion in February.

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