Pakistan seeks IMF’s economic support


Islamabad : Pakistani president and prime minister Tuesday urged the International Monitory Fund (IMF) to continue its economic support for the war ravaged and flood stricken economy of Pakistan.

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The IMF team is in Pakistan for talks for a fifth review of Pakistan’s economic performance for provision of an instalment of $1.7 billion under the standby arrangement.

President Asif Ali Zardari while talking to Director, Middle East and Central Asia Department IMF, Masood Ahmed, said that due to war against terror and the worst-ever floods in the history, the country’s economy had to suffer major blows and it needed international assistance by way of creating economic opportunities for the people.

The IMF team will also review progress on its conditions which include a monthly increase in electricity tariffs, reduction in government borrowings from the State Bank of Pakistan and implementation of a 10 per cent income tax surcharge and the reformed general sales tax.

The IMF officials will hold formal talks with Finance Minister Dr Abdul Hafeez Shaikh and political leaders to convince them to stop opposition to the proposed Reformed General Sales Tax (RGST).

The visit of the delegation was originally scheduled for January 25 but the government’s inability to comply with IMF’s terms led to a change of plan. The government delayed decision on the RGST after allies and opposition parties strongly opposed it.

President Zardari noted that the government was pursuing a policy of elimination of general subsidies and replaced the same with targeted subsidies for the poor and vulnerable communities alone, presidential spokesman, Farhatullah Babar, said.

The president said that the government was making all efforts to ensure transparent economy in order to reduce corruption and to address the issue of tax evasion. He also highlighted various tax reforms measure taken by the government.

The IMF delegation also met Prime Minister Syed Yusuf Raza Gilani, who also urged the IMF to continue to help Pakistan to overcome economic challenges. He said the government of Pakistan was implementing the economic reform program in the interest of the country.

Masood Ahmed emphasized the need for stabilizing economy and appreciated that the government and its economic managers were conscious of this and had already taken some measures for stabilizing economy.

The director said that the IMF supports Pakistan’s direction to bring in financial discipline, the PM office said. He thanked the prime minister for his time and appreciated his resolve to implement economic reform agenda.