Pakistan's talks with IMF likely to finalize today

ISLAMABAD: The talks with the IMF to revive $7 billion Extended Fund Facility (EFF) likely to finalize today with a breakthrough, citing sources ARY News reported on Thursday.

According to sources, the International Monetary Fund (IMF) has been convinced to subsidy for poor energy consumers.

Power and gas tariffs for big consumers likely to be enhanced, as the government has agreed hike gas and electricity rates for the rich, sources said.

The lender will add some of its conditions in the circular debt management plan. “The government preparing to enforce decisions taken by the gas and power regulators OGRA and NEPRA.

“The final draft of the Memorandum of Economic and Financial Policy will be prepared today,” sources said. “Subsidy for poor consumers will remain intact in the circular debt management plan,” sources added.

“The IMF has been assured that the circular debt management plan is the need of Pakistan, and it is necessary for the national economy to address the power and gas losses,” sources at the finance ministry said.

“The IMF team has understood difficulties faced by Pakistan and accepted that the deficit has increased after unprecedented floods in the country,” sources said.

“There could be some relief in IMF demands and it has reviewed some of its targets,” sources added.

Earlier, the IMF had demanded records of flood rehabilitation expenditures during the talks.

The policy-level talks between Pakistan and the IMF entered in a crucial phase as the IMF mission held a virtual meeting with Prime Minister Shehbaz Sharif.

Sources earlier told ARY News that the IMF has conditionally agreed to exempt Rs475 bln in primary budget deficit, making the exemption conditional to verification of flood relief expenditure.

Sources claimed that the lender demanded the records of flood rehabilitation expenditures from Pakistan, adding that the government would have to provide complete monitoring of flood expenditure and details.

During the meeting, the government apprised the lender that primary budget deficit could reach Rs1100 billion rupees, adding that the flood-related expenditures were the major reason behind budget deficit.