Evaluation
ISLAMABAD: A team from the International Monetary Fund is reaching Islamabad on Thursday to conduct evaluation of economic performance of Pakistan under the Stand-By Arrangement facility.
Following the successful conclusion of these talks, Pakistan remains optimistic about receiving the next tranche worth $700 million as stipulated in the Staff Level Agreement.
During the first quarter of the current financial year, the government has implemented several measures, including raising gas, electricity and oil prices, to meet IMF’s conditions.
Furthermore, Pakistan’s foreign exchange reserves and current account deficit are aligned with the IMF’s stipulations.
Notably, Pakistan exceeded its tax collection target by Rs66 billion, as per the agreement with the Fund.
However, it is worth noting that the IMF still harbors concerns about Pakistan’s management of the exchange rate and seeks assurances regarding external funding. Additionally, there are reports suggesting that the IMF is requesting the withdrawal of a circular issued in 2022 aimed at regulating exports.
The $3 billion Staff-Level Agreement was reached with the IMF after extensive negotiations, marking the conclusion of Pakistan’s previous $6.5 billion program, which was abandoned before completion.
Meanwhile, the interim federal cabinet exploded a gas bomb by approving a substantial increase in natural gas tariffs for various consumer categories.
The Power Division notified up to 172 percent hike in gas cost for domestic users, tandoors (traditional ovens), general industries, export-oriented sectors, captive power plants, compressed natural gas (CNG) operations, and independent power producers (IPPs), as well as commercial sectors.
The cabinet meeting, chaired by the Caretaker Prime Minister, announced that the new tariffs would come into effect on November 1.
This significant tariff adjustment was undertaken in response to a demand from the International Monetary Fund (IMF), which called on the government to raise gas tariffs in an effort to address the circular debt in the gas sector, which stands at Rs2.1 trillion.
