Pakistan and the International Monetary Fund (IMF) will resume talks on the 9th review of the loan program in a virtual meeting today. The online meeting follows week-long in-person negotiations that failed to make headway last week.
“Duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest,” Finance Secretary Hamed Yaqoob Sheikh told Reuters in a text message, confirming that talks were resuming on Monday.
Talks centre around reaching an agreement on a reforms agenda under the country’s $6.5 billion bailout programme, which it entered in 2019. An agreement on the ninth review of the programme would release over $1.1 billion.
An IMF delegation visited Pakistan earlier this month and held meetings with top officials including Finance Minister Ishaq Dar. The delegation also spoke to Prime Minister Shehbaz Sharif via a video link.
However, the talks ended without a staff-level agreement (SLA), and the IMF handed down a list of demands to Pakistan, called ‘prior actions’ that the country needs to complete before it receives the next loan tranche of $1.2 billion.
The virtual sessions that begin on Monday will pick up the thread. Pakistan is expected to brief the IMF about the steps it has taken to meet the conditions set by the Fund.
Soon after the IMF delegation left, Ishaq Dar announced that the government will be introducing a ‘mini-budget’ to raise Rs170 billion in new taxes.
The government has also approved a surcharge for ‘big’ consumers of electricity.
Sources in Islamabad told Aaj News that the government is planning to promulgate an ordinance to introduce the mini-budget, instead of getting it approved by the Parliament.
Pakistan’s foreign exchange reserves held by the central bank have fallen to $2.9 billion, barely enough to cover three weeks of imports. A resumption of the IMF programme would also unlock other avenues of funding for Pakistan.
An agreement, if reached, would still need to be cleared by the IMF board.
