Finance Minister Shaukat Tarin will leave for Washington on Tuesday to kick off policy level talks with the International Monetary Fund (IMF) for finalising an agreement on completion of sixth and seventh reviews under the $6 billion Extended Fund Facility (EFF).
The finance minister will be heading a delegation from Pakistan including senior officers and State Bank of Pakistan (SBP) Governor Dr Reza Baqir.
Earlier on Saturday, Pakistan and the International Monetary Fund (IMF) concluded technical-level discussions on a ‘positive note’ and agreed to continue talks at a higher level in Washington from next week to put $6 billion Extended Fund Facility (EFF) back on track.
According to media reports, the next 10-days policy level talks will cover remaining issues related to taxation and power sector.
Pakistan has partially complied with its commitments by taking a few measures in the budget 2021-22 while ignoring other steps, including increasing power tariff, due to fear of political backlash from opposition parties.
The IMF has asked Pakistan to manage the financing of the current account deficit (CAD) through non-debt creating dollar inflows or take corrective measures to allow adjustments in the exchange rate and further hiking of discount rate in order to discourage demands by making imports expensive.
In July 2019, the IMF had approved a 39-month $6bn EFF arrangement for Pakistan to support Islamabad’s economic reform programme. The government paused the programme in June 2021 for three months and implemented its indigenous policy measures to shore up revenue instead of putting an extra burden on the existing taxpayers.
In June, Tarin had assured the Fund of achieving all targets set by it without additional measures as suggested by the IMF.