ISLAMABAD: Pakistan and the IMF have so far failed to narrow down their differences, so both sides have decided to put completion of the sixth review under the $6 billion Extended Fund Facility (EFF) on hold for the next few months, it has been learnt.
Pakistan and the IMF authorities could not evolve a consensus on the staff-level agreement, so the completion of the sixth review under the EFF was put on hold till September 2021. The IMF Board was scheduled to take up approval of 6th review by July this year. But now it was decided that it would be completed by September if IMF staff showed satisfaction over implementation of conditions and agreed structural benchmarks, top official sources confirmed to media.
The inability of Islamabad to complete the sixth review of IMF program will have far-reaching consequences for the economy because two program loans having worth of $600 million meant for energy sector and bringing capital sector reforms from the Asian Development Program (ADB) would not be materialized in the absence of letter of comfort from the IMF. However, Pakistani authorities are confident that the much-awaited program loan of $800 million from the World Bank (WB) was on the cards as the WB’s Executive Board was scheduled to meet on June 30, 2021 in Washington, DC, for approving this loan after conceding that Pakistan’s macroeconomic framework was largely stable despite the fact that sixth review was still pending. However, there are two conditions still in pending mode so its disbursement would be linked to fulfillment of these major conditions. The government requires approval of the Council of Common Interest (CCI) in order to fulfill one condition.
