The talks with the IMF to revive the $7 billion Extended Fund Facility (EFF) are likely to finalize today with a breakthrough, citing.
According to sources that the International Monetary Fund (IMF) has agreed to provide subsidies for low-income energy users.
According to sources, the government has agreed to raise gas and electricity prices for the wealthy, therefore power and gas tariffs for large consumers are likely to be increased.
“The government intends to enforce decisions made by the gas and power authorities OGRA and NEPRA,” the lender stated in the circular debt management plan.
“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.
According to sources, “the IMF team has comprehended Pakistan’s challenges and agreed that the deficit has grown as a result of the nation’s historic floods.”
The sources added, “The IMF has reviewed some of its benchmarks and there may be some relief in its demands.”
The IMF had before requested proof of the expenses involved with flood rehabilitation during the talks.
The IMF mission held a virtual meeting with Prime Minister Shehbaz Sharif as the policy-level discussions between Pakistan and the IMF neared a critical stage.
The primary budget deficit of Rs475 billion will be allowed by the IMF on the condition that flood relief expenses are verified.
According to sources, Pakistan’s government would need to submit full monitoring of flood expenditures as well as specifics. The lender reportedly sought the records of Pakistan’s flood repair expenditures.
The primary budget deficit might total Rs. 1100 billion, the government informed the lender during the meeting, noting that flood-related expenses were the main cause of the shortfall.
