Home Latest News Finance Division Rebuts Reports of IMF Talks Failure

Finance Division Rebuts Reports of IMF Talks Failure

by Newsweek Pakistan

Saul Loeb—AFP

Statement maintains talks are ongoing and there is no deadline for ending them

The Finance Division on Sunday dismissed media reports about the failure of talks between Pakistan and the International Monetary Fund (IMF), claiming there was no deadline for ending the negotiations and they were proceeding positively.

In a statement, the division said that its secretary was leading talks with the IMF in Washington, D.C., adding that technical teams of both sides were continuing detailed discussions after exchanging relevant data sets. Former finance minister Shaukat Tarin, whose term expired last week as he was appointed to the post unelected and has not been accommodated in Parliament within the six months required to do so, told a press conference at Pakistan Embassy last week that he was leaving for New York while the finance secretary would continue for further dialogue with the IMF.

Tarin, who is no longer legally able to head any meetings, said he would join the talks virtually and could return for more engagement if required.

In an interview with private broadcaster Geo News from New York, Tarin on Sunday said reports of the talks with the IMF failing were “false.” He maintained that the negotiations were ongoing and reiterated claims of the country’s economic situation being on a positive trajectory.

Ongoing talks

Local media in Pakistan over the weekend reported that the IMF had conveyed to Pakistan its dissatisfaction over the measures undertaken for economic stability. While Energy Minister Hammad Azhar has sought to deny that recent price hikes were related to the government seeking to restore a suspended Extended Fund Facility with the IMF, the prevailing view is that the decision to raise electricity tariff by Rs. 1.39/unit and POL prices by Rs. 10.49/liter for petrol and Rs. 12.44/liter for diesel, are part of measures required by the global lender for the resumption of the bailout.

According to sources, the IMF—during the talks with the government—is dissatisfied with the pace of accumulation of circular debt, and believes the Rs. 1.39/unit power tariff hike is insufficient; the lender has proposed a hike between Rs. 1.5-2.5/unit to be able to counter circular debt.

The IMF has reportedly also sought additional taxes, including abolishing GST exemptions; adjusting personal income tax slabs to increase the minimum ceiling; raising regulatory duty; and reducing the Public Sector Development Program by Rs. 200-300 billion.

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