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Govt-IMF holding virtual talks from Monday for implementation of upfront measures linked to revival of loan

ISLAMABAD: The economic team of Pakistan and the IMF officials are resuming virtual talks from Monday (Feb 13) to discuss the implementation of upfront measures linked to the completion of the ninth review and disbursement of $1.1 billion next tranche.

The IMF mission left Pakistan on Friday after holding talks with the government for almost 10 days without signing a staff-level agreement.

The IMF mission handed over the MEFP to the government, asking for the completion of some upfront measures before the signing of the agreement.

Consequently, on Saturday (Feb 11), the Economic Coordination Committee of the Cabinet approved the power tariff hike by withdrawing subsidies for the export-oriented sector and the Kissan package. The committee also levied one rupee per unit surcharge for the big power consumers to reduce circular debt.

Federal Minister for Finance Senator Muhammad Ishaq Dar chaired the meeting of the ECC. The meeting discussed the revenue and fiscal measures to be taken to fulfill the demands of the IMF before signing the staff-level agreement.

The ECC reviewed the quarterly tariff adjustments, fuel price adjustments, and imposition of one rupee/unit surcharge on big power consumers.

The meeting also approved a revised circular debt management plan. With this plan, the tariff would be increased by Rs7-8 per unit till August 2023. Also, the base tariff will be increased from Rs15.28/unit in June 2022 to Rs23.39 till June 2023.

The government, however, has protected power users of 300 units from an upcoming hike in tariff.

As per IMF demand, the additional subsidy was slashed from Rs675 billion to Rs335 billion.

Meanwhile, the government has received the Memorandum of Economic and Financial Policies (MEFP) from the International Monetary Fund (IMF) regarding the conclusion of the ninth review of a $7 billion loan program.

Finance Minister Dar said that the government and Fund representatives would attend a virtual discussion on this subject on Monday.

“We insisted that they (the Fund delegation) give us the MEFP before departing so we could look at it over the weekend,” he said.

Earlier, the IMF Mission Chief Nathan Porter delivered a concluding statement stating that virtual conversations will continue between the two sides in the following days.

These conversations will be done to finalize the implementation of key targets. The finance minister revealed these specifications during a press conference in Islamabad.

Talks between the government and the IMF took place from January 31 to February 9. There was significant uncertainty regarding the results of the discussions. Moreover, whether a MEFP draft had been shared as the visiting party departed without making a concluding statement.

Dar said there was no confusion during his press appearance today. He said that the government and Fund representatives would attend a virtual discussion on this subject on Monday. “We insisted that the Fund delegation should give us the MEFP before departing. So that we could look at it over the weekend,” he said.

He continued, “I am confirming that we received the MEFP draft at 9 am today. Over the weekend, we will thoroughly review the (MEFP) draft. Furthermore, we will have a virtual meeting with the Fund officials. It will undoubtedly require several days.

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I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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