Miftah sought increase in size and duration of IMF’s Extended Fund Facility

Minister for Finance and Revenue Miftah Ismail said the government has sought an increase in the size and duration of the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) programme.

Addressing a press conference in Washington, the minister said he and his team had productive talks with the IMF, World Bank and International Finance Corporation.

“We have requested the IMF to extend the EFF programme by a year from 3 to 4 years,” said Miftah, adding that his team received a positive response in this regard. “We have also requested the fund to enhance the overall loan size by $2 billion,” he said.

The minister said that he has requested the $900 million tranche be enhanced. The tranche is expected to be released after the successful conclusion of negotiations with the IMF.

Miftah said that the IMF has agreed to send its mission to Pakistan in the middle of the next month for continuation of EFF programme and the incumbent government will fulfill all sovereign commitments made by the previous governments with IMF and regarding CPEC.

“The Government of Pakistan has never defaulted in the last 70 years and will not default in the future too,” said the finance minister. He said there had been excessive budget deficits which led to rise in debts.

“We will try to reduce the debt to GDP ratio, which will be achieved by increasing the overall GDP,” he said.

Earlier, Nathan Porter, IMF Mission Chief for Pakistan, issued a statement stating the fund “agreed that prompt action is needed to reverse the unfunded subsidies which have slowed discussions for the 7th review. Based on the constructive discussions with the authorities in Washington, the IMF expects to field a mission to Pakistan in May to resume discussions over policies for completing the 7th EFF review.

“The authorities have also requested the IMF to extend the EFF arrangement through June 2023 as a signal of their commitment to address existing challenges and achieve the program objectives.”

Miftah also clarified that the current government will not stall programmes initiated by the previous government including the Ehsaas programme. But he said Pakistan cannot afford to continue subsidy on petroleum products due to its economic condition.