ISLAMABAD, March 15 (INP): Despite the country’s improved economic performance, the latest round of economic review talks between Pakistan and the International Monetary Fund (IMF) concluded without a staff-level agreement.
However, sources privy to the development said that pending issues could be resolved through virtual discussions in the coming weeks.
According to officials familiar with the negotiations, Pakistan will be required to implement several measures under the Memorandum of Economic and Financial Policies (MEFP) before securing the next tranche of the IMF loan.
Among these conditions is a further increase in the petroleum levy by Rs 10 per litre, raising it from Rs 60 to Rs 70 per litre.
The government has reportedly expressed its willingness to impose a carbon levy, should the IMF demand it.
The Fund has also urged further reforms in the tax and energy sectors, emphasising the need for broadening the tax base and eliminating subsidies that distort market pricing. It has reiterated its long-standing demand for bringing the retail, real estate, and wholesale sectors into the formal tax net.
Sources within the Ministry of Finance indicate that while no immediate agreement was reached, the IMF Executive Board is expected to review Pakistan’s progress in May.
If the agreed-upon conditions are met, the Board will approve the disbursement of the next tranche of $1 billion under tunder the $7 billion loan programme.
Despite Pakistan’s efforts to meet the IMF’s fiscal consolidation targets, concerns remain over the pace of privatisation of state-owned enterprises (SOEs), particularly the electricity distribution companies (DISCOs) and Pakistan International Airlines (PIA).
The IMF has repeatedly pressed Pakistan to accelerate these reforms as part of broader economic stabilisation measures.
On March 14, the government successfully convinced the global lender that no mini-budget will be introduced before the end of June.
Officials from the Ministry of Finance claim the IMF has expressed satisfaction with the country’s economic performance, paving the way for the release of the next tranche of $1 billion under the $7 billion loan programme.
