ISLAMABAD: Today marks the commencement of the second round of discussions between Pakistan and the International Monetary Fund (IMF) regarding the final tranche under the loan program.
The talks will primarily concentrate on pivotal economic reforms, notably the privatization of state-owned enterprises.
In today’s meeting, representatives from various institutions, including the Ministry of Finance and FBR, are slated to provide briefings to the visiting delegation.
The IMF has expressed concerns regarding the allocation of 42.5% of funds held by the federation under the National Finance Commission Award, deeming it insufficient, and has called for a review involving the provinces.
IMF representatives have emphasized the necessity for Pakistan to present a comprehensive privatization plan for entities like Pakistan International Airlines (PIA) and other government-owned enterprises.
Sources indicate that the IMF team will receive insights into the terms and conditions of loans between banks and the government for privatization endeavors.
There is potential for reaching a term sheet agreement for the privatization of PIA, with an interest rate of up to 12%, according to sources.
Following the finalization of the loan term sheet agreement, banks are expected to issue a No-Objection Certificate (NOC). Additionally, the IMF delegation will be briefed on domestic financing, government guarantees, and other pertinent expenses linked to privatization endeavors.
Furthermore, the Federal Board of Revenue (FBR) will engage in discussions with the IMF regarding tax policies, administration, and revenue generation.
However, sources from the Energy Ministry have indicated that the IMF has expressed dissatisfaction with the performance of Pakistan’s energy sector. Consequently, discussions will ensue on topics such as circular debt and power purchase agreements.
The discussions will also cover strategies for reducing the circular debt of the energy sector, timely adjustments, and tariff increments. Additionally, fiscal deficit control, future budget strategies, and immediate measures to address potential reductions in tax collection will be on the agenda.
In an effort to enhance transparency and combat corruption, the State Bank of Pakistan is scheduled to brief the IMF delegation on plans to introduce new plastic currency notes.
Furthermore, progress on issuing reports under the United Nations Anti-Corruption Convention will be shared during the discussions.
