Imf Agreed To Give Pakistan $7 Billion Loan, Imposed Very Strict Conditions
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The International Monetary Fund (IMF) has agreed to give Pakistan $ 7 billion in the next installments of the loan, but at the same time it has imposed very strict conditions on Pakistan. On Thursday, the IMF in its statement bluntly said that Pakistan will have to “take additional steps”. Earlier, the IMF had imposed a condition on the government of Pakistan to bring its budget in profit equal to 0.2 percent of GDP (Rs 153 billion). Now it has increased this target to 0.4 percent.
The Government of Pakistan had sometime presented a budget of 0.2 per cent budgetary benefit presented earlier for the financial year 2022-23. Now the IMF has said that keeping this budget at 0.4 per cent profit will be a decisive factor in the continuation of the loan program. This means that the Government of Pakistan will have to cut subsidies further and pass more tax burden on the public.
The IMF has said that Pakistan is committed to pursuing reforms. Among the reforms it has promised are electricity tariff reforms. The debt on the power sector in Pakistan is expected to increase to Rs 850 billion this year. The IMF has said that this is more than the limit set by it. That is, there will be a debt incident to Pakistan. The meaning of these things has been understood that the electricity rates in Pakistan will increase further in the coming days. Only by making electricity expensive, Pakistan can reduce the debt on this sector.
According to the terms of the IMF, Pakistan will have to take measures to reduce corruption. According to the IMF, the money saved by reducing corruption should be spent by Pakistan on poverty alleviation programs and providing social security to the people. According to the IMF, Pakistan has agreed to adopt an electronic system of asset declaration, which will increase the edge of anti-corruption institutions. It will also help in investigation of corruption related cases.
Pakistan’s foreign exchange reserves are under deep pressure. In such a situation, it has become mandatory for him to get loan from IMF. If he does not get the loan installments, then he is in full danger of becoming a defaulter. With IMF funding, Pakistan will be able to avoid this threat for the time being. But experts say that the IMF’s debt is only a temporary relief. This will save Pakistan from being a defaulter for now, but if it does not become a permanent source of foreign exchange, then there will be a possibility of this happening in the future.
According to analysts, the Pakistan Democratic Movement government, led by Shahbaz Sharif, has accepted the terms of the IMF, due to which its political support may further decline. The new hit of electricity inflation will hit the consumers of Pakistan. Already within one and a half months, the price of petrol in the country has increased by about Rs 110 per liter. Because of this, overall inflation has increased. This gives a clear indication of increasing discontent among the people.