Key Takeaways
- The Finance Division rejected claims that the IMF programme is primarily focused on fiscal targets.
- The programme is described as a whole-of-government initiative involving multiple federal and provincial institutions.
- The ministry disputed the characterization of the PDL as the central point of the IMF programme.
The Finance Division has issued a statement rejecting what it termed 'misleading' reports about Pakistan’s engagement with the International Monetary Fund (IMF).
In response to a report by The Express Tribune on September 22, the ministry clarified that the IMF’s Extended Fund (EF) and Resilience and Sustainability (RS) facilities involve reforms and commitments across multiple federal and provincial institutions.
The ministry stated that concerned ministries and institutions participate and lead technical discussions, including benchmark setting related to their respective mandates.
The Finance Division also rejected the notion that the IMF programme is focused primarily on fiscal targets, emphasizing that the programme includes growth-enhancing structural reforms, social protection, governance, energy-sector efficiency, climate resilience, and measures to reduce economic distortions.
Regarding the petroleum development levy (PDL), the ministry clarified that it is one of several revenue instruments and not the central point of the programme. The ministry noted that the fiscal strategy includes FBR revenue mobilization, expansion of the tax base, provincial taxation, and expenditure rationalization.
The Finance Division disputed an analytical error in linking the PDL directly to inflation, unemployment, poverty, and low economic growth. It stated that Pakistan’s inflation and growth outcomes are influenced by multiple factors, including geopolitical developments and global shocks.
The ministry highlighted that fiscal consolidation under the IMF programme has contributed to reducing macroeconomic imbalances and supporting disinflation and external-sector stabilisation through reserve accumulation and recovery in overall growth.
The Finance Division also pointed out that the latest IMF staff report specifically highlighted reforms aimed at supporting stronger growth while protecting vulnerable households.
