November 21, 2022
2 mins read

Dar in a bind as Pakistan-IMF talks hit roadblock again

Islamabad has also not furnished a full report of the economic situation and the utilisation of the first tranche of funds to the IMF due to the floods. …reports Mahua Venkatesh

Pakistan’s Finance Minister Ishaq Dar finds himself in a bind. Dar, a close aide of PML-N supremo, was reappointed Finance Minister, promised to bring down prices and reduce taxes. But now with talks between Pakistan and the International Monetary Fund once again hitting a roadblock, his actions will be scrutinised with a fine tooth comb.

Dar, who took over in September, has managed to do little for the economy so far. And now, amid Pakistan’s reluctance to impose additional taxes on petroleum products as prescribed by the multilateral agency, talks between Islamabad and IMF, which were supposed to be held last month have not taken place. An analyst tracking South Asian economies said that there is no clarity on the review meeting. This has once again triggered fresh fears of a sovereign default.

Besides imposition of additional taxes, IMF riders for reviving the loan programme also included a commitment of tax-to-GDP ratio of at least 11 per cent. The country’s tax to GDP ratio, though has improved, is still in single digit.

Islamabad has also not furnished a full report of the economic situation and the utilisation of the first tranche of funds to the IMF due to the floods. With the deteriorating economic situation in Pakistan, its own allies and even other multilateral agencies have shown reluctance in doling out funds to the South Asian nation.

Pakistan is in need of more than $32 billion this fiscal year for debt repayment.

Pakistan’s former Finance Minister Miftah Ismail had been instrumental in reviving the stalled IMF loan programme. As part of the programme, Ismail however had to eliminate petroleum subsidies and imposed taxes, for which he had come under severe criticism even from his own party members.

With headline inflation touching 26.6 per cent in October – an increase from 23.2 per cent in the previous month, the Shehbaz Sharif government will find it difficult to impose additional taxes.

The Pakistani rupee after handsome gains against the US dollar in October, is also once losing sheen.

Hit by severe floods and rising political uncertainty, the country’s economic situation has only deteriorated in the last few months.

Now following India’s footsteps, Pakistan also wants to buy discounted Russian oil. Islamabad is hoping to ink a similar oil deal as that of India in relation to purchase of oil from Russia.

However, an analyst said that it may not be easy for Pakistan to clinch a similar deal especially as tension between Islamabad and Moscow has risen after the latter claimed that Ukrainian officials have been in Pakistan to discuss nuclear weapons technology. Also observers are not sure how the US will react if Pakistan starts importing oil from Russia.

ALSO READ: India-Australia cooperation on climate action

Previous Story

Kabir’s cricket bats powering int’l players’ strokes

Next Story

Cultural shows replace sound of bullets in Kashmir

Latest from -Top News

Pahalgam Bled, But Kashmir Didn’t Bow

Pahalgam was the latest act in a long campaign of Pakistan-based militancy aimed at destabilizing Kashmir, especially as the region has gained strength through development,…writes John Spencer On April 22, 2025, gunmen

India–EFTA Trade Deal Gets Swiss Nod

Switzerland Ratifies Landmark EFTA-India Trade Pact, Paving Way for $100 Billion Investment…reports Asian Lite News Switzerland has ratified the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade

Jaishankar Meets SCO Chief

Jaishankar is on a three-day visit to China to attend the Foreign Ministers’ Meeting of the SCO member states being held in Tianjin….reports Asian Lite News External Affairs Minister S. Jaishankar met

Jaishankar Bats for Better Ties with China

Jaishankar underlined the importance of open dialogue and the exchange of perspectives as essential between two major neighbours and economies….reports Asian Lite News External Affairs Minister S. Jaishankar, in talks with Chinese

UN slams resumption of Houthi attacks

In the first such incidents for more than six months, the Yemeni group seized and then scuttled two Liberian-flagged bulk carriers operated by Greek shipping firms, leaving four seafarers presumed dead and
Go toTop

Don't Miss

Lahore Tops Global Pollution Charts Again

Millions of people’s lives and health have been impacted by

Pakistan literacy rate remains stagnant at 60%

The survey has shown that net enrolments at the primary,