Pakistan and the International Monetary Fund (IMF) were unable to achieve an agreement at the staff level to revive the $6 billion program due to significant differences in their views of the economy and the immediate steps required to avoid economic disaster.
The IMF emphasized the “urgency of tangible policy initiatives, including the removal of fuel and energy subsidies” in a handout on Wednesday.
The talks, which took place in Doha, Qatar, from May 18 to 25, ended in “disappointment,” according to a senior official. Miftah Ismail, Pakistan’s Finance Minister, and Nathan Porter, the IMF’s Mission Chief in Pakistan, led their respective delegations.
Pakistan and the IMF failed for the second time to achieve an agreement at the staff level on the 7th review of the $6 billion Extended Fund Facility. The previous PTI government had also failed to persuade the IMF to finish the seventh review and disburse a loan tranche worth roughly $1 billion.
The removal of gasoline subsidies, according to one senior member of the Pakistani team, is the only roadblock to the announcement of the staff level agreement. He did agree, though, that some policy gaps existed.