IMF concerned over incomplete circular debt target

ISLAMABAD: Pakistan could not attain targets of the power sector’s circular debt and primary balance surplus, set by the IMF, citing sources ARY News reported on Tuesday.

The International Monetary Fund (IMF) mission has expressed concern over failure in meeting the target of circular debt in power sector and primary balance surplus, sources said.

The primary balance surplus remained Rs. 400 billion instead of 417 billion rupees target set by the lender, sources said.

The IMF mission also expressed concern over the power sector’s circular debt.

“In next two days’ of the policy level talks target of the circular debt will be reviewed,” sources added.

Caretaker Finance Minister Dr Shamshad Akhtar on Monday said that Pakistan has assured the IMF of controlling budget deficit by cutting expenditures.

While informally talking to ARY News, Finance Minister Shamshad Akhtar vowed that tax burden will not be broaden on people and the IMF’s tax target would remain unchanged at Rs9,415 billion.

“The federal government would adopt austerity policy to cut expenditures. We assured IMF of controlling the budget deficit by reducing our expenditures. The policy-level talks between Pakistan and IMF are progressing in a positive way. The finance secretary is holding policy-level talks with the IMF mission.”

She said that IMF showed complete satisfaction on the caretaker government’s steps including Pakistan’s development spending and Benazir Income Support Programme (BISP).

The caretaker government will not impose “any new taxes” as the officials have convinced the IMF mission, visiting Pakistan, sources said.

Pakistan is operating under a caretaker government after an IMF loan programme, approved in July, helped avert a sovereign debt default.

Under the $3 billion standby arrangement (SBA), Pakistan received $1.2 billion from the IMF as the first tranche in July.

Last week, an IMF mission kicked off its review for the second loan tranche, which is expected to continue till Dec 15. A successful review would unlock $710 million for the country in December.