Friday, February 3, 2023

First round of Pakistan-IMF virtual talks remains inconclusive

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The first round of talks between Pakistan and the International Monetary Fund (IMF) remained inconclusive as the government officials failed to convince the global financing lending institution to revive the loan programme, citing sources, ARY News reported on Tuesday.

Sources within the finance ministry told ARY News that a deadlock occurred in the virtual talks between Pakistan and IMF for the 9th review of the loan programme. Sources added that Pakistan assured the IMF of completing the 9th review.

However, the schedule for the visit of an IMF mission to Pakistan was not finalised in the first round of virtual talks today. Sources said that both sides are expected to continue the negotiations tomorrow.

READ: FINANCE MINISTER SEEKS PM’S ASSISTANCE AFTER FAILING TO REVIVE IMF PROGRAMME

The economic team and the IMF officials would complete the virtual dialogues by Wednesday (tomorrow). Before the arrival of the IMF mission, the global institution asked Pakistan to meet the demands.

Sources said that Pakistan assured the IMF of achieving all targets. It was learnt that the schedule for the IMF mission’s visit to Pakistan is likely to be finalised after the conclusion of the virtual talks.

IMF’s pre-conditions

Pakistan and International Monetary Fund (IMF) held the first round of virtual talks on the pre-conditions for the revival of the loan programme.

Sources told ARY News that the IMF asked Pakistan to maintain the US dollar exchange rate with the open market price besides ending the artificial ban on the exchange rate.

READ: PAKISTAN WANTS TO COMPLETE 9TH IMF REVIEW WITHOUT ANY DELAY: PM SHEHBAZ

Moreover, the global financing institution also sought a roadmap for the collection of Rs855 billion via petroleum levy by June 30, 2023, sources added.

It was learnt that the IMF asked Pakistan to increase levy on diesel from Rs35 to Rs50 per litre besides ending the circular debt on the gas sector worth Rs1,500 billion and implementing the Oil and Gas Regulatory Authority’s (OGRA) decision to hike the gas prices.

Sources said that it was also among the IMF conditions to increase the gas rate by 74% from July 1, 2022, to reduce the circular debt. Moreover, Pakistan was also asked to take steps for increasing the Rs200 tax collections.

It emerged that the federal government prepared an ordinance to increase the tax net. The government would also be bound to impose sales tax on petrol and diesel. For the revival of the IMF programme, the government will also need to increase the basic electricity tariff to reduce the line losses.

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