Jihad Azour, Director of Middle East and Central Asia Department, IMF, stated in Washington, DC, on Friday said the IMF had been waiting for the outcome of loss assessment being worked out by the World Bank and UNDP on the devastating floods in Pakistan, which would become the basis of providing help to the country.

He said that they were saddened by the loss of human lives and livelihoods in Pakistan by the floods. We have already sent and we reiterate our condolences to the people of Pakistan. When asked whether the IMF will consider rescheduling debt to Pakistan amid the devastation due to floods, Jihad Azour replied the Fund has been very supportive to Pakistan over the last period. We have a program with Pakistan that has been extended and increased in size. This is to help Pakistan deal with the confluence of shocks starting with the COVID-19 crisis where we provided additional flexibility. We accelerated some of our disbursement recently to the exogenous shocks and the shock of increase in price of food and commodity. We had recently completed a review that provided Pakistan with $1.2 billion and hopefully we will be fielding a mission in November after the annual meetings to Pakistan in order to start with the authorities preparing for the next review.

We are waiting currently for the assessment of damages the World Bank and UNDP are conducting in order to see the repercussions on public finance and the impact on the economy and on the society.

Based on this assessment, he said, We will need to update our numbers and based on our discussion with the authorities, we will also listen to them to see what are their priorities, and how the Fund can help. Of course, on the issue of subsidy, as in other parts of the world, subsidy that is targeted to support certain items has proved not to be very effective. I would say it has proved to be very regressive. And in our regional economic outlook we are again looking at this issue that is showing that this is not the best way to use the very limited fiscal space that exists. Therefore, we are encouraging Pakistan as well as also other countries to move from an un-targeted subsidy that is a waste of resources and to dedicate those resources to those who need it.

The IMF official said, The region spends on social protection 2 percent of GDP and in certain cases what countries are spending on subsidies could be the double of that. Therefore, it s very important to use this moment where challenges are mounting, where increase in prices is hurting, to reallocate the resources for those who need it most. And this is something that it s not, I would say, part of the IMF conditionalities, this is part of what is needed in order to provide the right protection for those who need it at the time where inflation is very high.

He stated that since the outbreak of the Covid crisis, the IMF has supported both the Middle East and North Africa (MENA) and Caucasus and Central Asia (CCA), plus Afghanistan and Pakistan, with US$21.3 billion in financing. And, in addition, in 2021, it provided, through the SDR allocation, additional boost to reserves by US$49 billion.

Earlier, Federal Minister for Finance & Revenue Senator Ishaq Dar met International Monetary Fund s Deputy Managing Director (DMD) Antoinette Sayeh on Friday in Washington. He told her of the damages caused by the unprecedented floods in Pakistan, and shared with her the government s vision for stabilising the economy and carrying out sustainable and resilient recovery.

The DMD appreciated the government s policies and assured the minister of IMF s continued support to Pakistan. Ishaq Dar, in his meeting with World Bank President David Malpass, thanked the bank for its continued support to socio economic development of Pakistan. He thanked the World Bank for its assistance for rescue and relief operations in the aftermath of unprecedented devastating floods. President Malpass assured that the Bank would continue to work with Pakistan to help it overcome its socio-economic challenges due to the floods.

The finance minister, in a separate meeting with Martin Raiser, Vice President SAR, World Bank, thanked him for undertaking a visit to Pakistan to see firsthand the devastation caused by the floods. The vice president assured him that the bank would continue to support Pakistan in overcoming the economic difficulties that the country was facing.

The minister also met Dr Muhammad Sulaiman Al Jasser, President of the Islamic Development Bank (IDB). Dar thanked him for the IDB s continued engagement with Pakistan. He appreciated that Pakistan and the Bank had remained trusted partners for decades. President Al Jasser appreciated the measures being taken by GoP to stabilise the economy while providing relief to the flood victims.

The finance minister in his meeting with the leadership of Deutsche Bank and J P Morgan elaborated upon the government s vision to stabilise the economy, while also providing relief to the victims of flood. He assured that the GoP was committed to completing the IMF s programme. The delegation also met with rating agencies and participated in several events being held during the annual meetings.

The delegation also engaged at the Pakistan House with a diverse group of Pakistani professionals, including leading businessmen, tech entrepreneurs and others.

The finance minister is leading Pakistan s delegation in the IMF/World Bank s 2022 annual meetings being held in Washington DC. Other delegates include Sardar Ayaz Sadiq, Federal Minister for Economic Affairs, Dr Aisha Ghaus Pasha, Minister of State for Finance & Revenue, Jameel Ahmed, Governor State Bank of Pakistan, Hamed Yaqoob Sheikh, Finance Secretary, Dr Kazim Niaz, Secretary Economic Affairs Division, and Ali Tahir, Additional Secretary, Finance Division.

Meanwhile, a statement issued by the World Bank stated that WB reminded Pakistani officials to focus on the implementation of fiscal and energy reforms to stabilise the economy and lay the foundation for a sustained growth.

The Bank s President, David Malpass, emphasised to Pakistan s delegation, led by Finance Minister Ishaq Dar, the importance of predictable economic policies to restore macroeconomic stability and market confidence, according to the statement issued by the World Bank.

The World Bank statement said that President Malpass encouraged the government to focus on the implementation of Pakistan s fiscal and energy reforms to stabilise the economy and lay the foundation for a sustained growth.