IMF’s Draft MEFP Awaited by Pakistani Government Amid Disagreements

The Pakistani authorities are expecting the International Monetary Fund (IMF) to share the draft memorandum of economic and financial policies (MEFP) with them, despite the current differences over external financing needs and power sector losses. As per The News, the IMF and Pakistan were scheduled to hold talks from January 31 to February 9, 2023, in an effort to reach a staff-level agreement and release the $1 billion tranche under the $6.5 billion Extended Fund Facility (EFF) signed by the Pakistan Tehreek-e-Insaf government in 2019.

The government led by Prime Minister Shehbaz Sharif is facing a challenging situation due to the strict conditions imposed by the IMF and the political consequences of these measures during the election year. In a speech addressed to the Azad Jammu and Kashmir Legislative Assembly, Prime Minister Shehbaz acknowledged the country’s substantial financial challenges and stated that the IMF is reviewing everything, including subsidies, during the ongoing ninth review of the loan program.

In the past, both parties took a considerable amount of time to reach a staff-level agreement, even after receiving the draft MEFP document and nine tables. However, according to the Pakistani authorities, the IMF mission has now changed its working style and will finalize the agreement before sharing the MEFP. If a consensus cannot be reached today, the IMF mission may extend its stay or continue discussions through online meetings from Washington DC, according to The News.