ISLAMABAD: The Government of Pakistan and the International Monetary Fund(IMF) will continue their talks regarding a bailout agreement for a secondday on Saturday in the federal capital.
Earlier on Friday, Pakistan and IMF held talks in Islamabad, after whichthe Ministry of Finance said they had made “good progress” in theirdiscussions. “Consultations will continue over the weekend,” it added.
Sources in the Ministry of Finance had earlier informed that Pakistan andIMF were close to finalizing a staff-level agreement expected to rangebetween $6-7 billion.
Under the proposed bailout agreement, Pakistan would have no choice but toconcede to the IMF’s demands to hike power tariffs and taxes and withdrawtax concessions and exemptions — which are among the conditions that thecountry has accepted to secure the loan.
According to the ministry sources, the government would increase the costsof electricity and gas for the consumers in two phases within this year.New taxes amounting to Rs700 billion would be revealed in the budget forthe next fiscal year, to be announced on June 11.
Budget deficit would be restricted to 4.5 per cent, whereas the revenuetarget for the Federal Board of Revenue would be set at around Rs5.3trillion. Interest rate would be brought up to 12 per cent.
Under the proposed agreement, the government would not control the rate ofthe dollar, and subsidies in the energy sector, as well as other sectors,would be withdrawn.
Furthermore, the plan to privatize institutions incurring losses would beshared with the IMF.