Pakistan and IMF talks fail despite preconditions for hike in electricity and petroleum prices

The precondition for the increase in the prices of electricity and petroleum products to be accepted …

ISLAMABAD (Daily Pakistan): Pakistan and the International Monetary Fund (IMF) have once again failed to reach an agreement at the staff level on time due to differences over the standard framework and uncertainty over the future roadmap of the economy. A new round of talks from October 4 to 15 to issue the next tranche of a ارب 1 billion loan and get a certificate of better economic condition was fruitless. Despite being accepted, negotiations failed

However, the two sides have vowed to continue the talks. In an effort to end the talks positively, Finance Minister Shaukat Tareen met separately with IMF Managing Director Kristalina Georgieva and US Assistant Secretary of State for South and Central Asian Affairs Donald Lowe. However, it seems that both these meetings did not prove fruitful.

According to the Express, the outgoing IMF Representative for Pakistan, Teresa Dobbins Sanchez, said that the IMF team was engaged in discussions with the Pakistani delegation to advance our agenda and that we were in talks with the Pakistani authorities on policies and reforms. This is the second time that Pakistan and the IMF have not been able to reach the “basis for completion of the Sixth Review”. This effort was also fruitless in June. And the IMF has so far failed to agree on a Memorandum of Economic and Monetary Policy (MEFP), which forms the basis of the bailout program.

Sources said that the parties have not yet exchanged final macroeconomic positions, which should have been completed by October 8. Uncertainty over the IMF talks could affect stock markets and put further pressure on the value of the rupee and the dollar. Pakistan and the IMF could not agree on a target for additional taxes and a roadmap for the financial stability of the power sector, raising gas prices and taking necessary steps to control the current account deficit. ۔

Talks began in Islamabad on October 4, Shaukat Tareen wanted the talks to end in Washington on October 15, Pakistan has shared electricity and gas tariffs and tax collection figures with the IMF, and Finance Minister Shaukat. “IMF officials are reviewing the figures and will keep us informed,” Tareen told a news conference in Washington.

It is to be noted that these figures are usually agreed upon before the start of policy level negotiations. However, the parties did not exchange important figures on the budget as there was a huge difference between the two sides. He said that the IMF had demanded an additional tax of at least 1% of GDP or more than Rs 525 billion but the government was ready for a tax of Rs 300 billion. This year, the FBR will achieve a tax collection target of Rs 5.8 trillion. In the next financial year, the tax-to-GDP ratio will be 13.75 per cent of GDP. At the end of the last financial year, The tax-to-GDP ratio was only 11.1%.

According to Shahbaz Rana’s report, Shaukat Tareen said during his news conference that Finance Secretary Yousuf Khan would stay in Washington till Tuesday to continue the talks. He was scheduled to return to Pakistan on Monday. I will, however, join the online negotiations if needed.

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