Pakistan close to sealing deal with IMF, says Khurram Dastgir

admin 8 February, 2023
Updated 2023/02/08 at 6:42 AM
5 Min Read
Minister for Power Engineer Khurram Dastgir Khan addressing a press conference in this undated photo
Minister for Power Engineer Khurram Dastgir Khan addressing a press conference in this undated photo

Power Minister Khurram Dastgir says IMF asked Pakistan to cut down line losses of electricity in its northern, southern, western areas

Federal Minister for Power Engineer Khurram Dastgir has shared an replace at the talks between the authorities and International Monetary Fund, announcing that Pakistan become on the verge of putting a cope with the lender as both events had reached a consensus on all problems.

With an economy of $350 billion, Pakistan is looking to the IMF for a key instalment of $1.1 billion to keep away from defaulting. The Fund has recognized a bigger hole of around Rs900 billion, or 1% of the gross domestic product (GDP), which represents a giant barrier to accomplishing a team of workers-stage agreement.

The IMF group has been in Islamabad for the previous couple of days for talks with the Pakistani authorities. Following technical-degree negotiations between Pakistan and the IMF’s negotiation group led via Nathan Porter, the two facets will begin policy-degree negotiations nowadays (Tuesday). The lender has imposed strict situations on Pakistan in numerous fields.

The minister, at the same time as speaking on Geo News programme ‘Capital Talk’ on Monday, stated that the IMF group had now not demanded the authorities to shrink its defence budget. “Instead, they [the IMF) sought the energy department to make its losses peter out.”

The IMF had also known as upon the usa to reduce down line losses of power in the united states of america’s northern, southern and western areas, he added.

The minister similarly said that the international lender had made it clean to Pakistan that the united states of america could have to set its house so as amid the accepted financial turmoil. He said Pakistan might have to enhance its tax sales and decrease losses.

Dastgir stated the worldwide powers were now not willing to expose Pakistan lenience because the US withdrew from Afghanistan.

Things to remain tight for a while: Miftah

On Sunday, former finance minister Miftah Ismail had said that Pakistan would remain in a tight spot for some time but had a chance to still survive.

“Things will be tight for a while but we can get enough loans for now that we will get some room,” Ismail had said, while replying to a question asked by The News during a question and answer session on Twitter.

Replying to another question regarding the economic damage caused due to the delay in the resumption of the bailout programme, Miftah had said that Pakistan had lost credibility in the eyes of international players, which was “very costly”.

Yawning gap in fiscal framework

As according to the Fund’s assessment, Pakistan confronted a number one deficit hole of zero.Nine% of the GDP, that is equivalent to Rs800-850 billion, particularly because of much less tax and non-tax revenues and accelerated expenses.

However, the Pakistani aspect did no longer accept any such fiscal gap, arguing that it was envisioned to the track of zero.Five to 0.6% of GDP within the variety of Rs400 to Rs450 billion for the cutting-edge fiscal yr.

The Washington-primarily based lender assessed that the Federal Board of Revenue of Pakistan (FBR) might face a shortfall of Rs130 billion in attaining the favored tax collection goal of Rs7,470 billion.

The government and the IMF may comply with abolish the reduced strength tariff for the export-oriented zone and hyperlink it with export proceeds.

The textile quarter is selling 40% of its produced objects in the domestic market, so it is inaccurate to get subsidies on energy and fuel price lists on the whole manufacturing.

“Differences nonetheless persist over ascertaining the exact economic hole among Pakistan and the visiting IMF overview task at some point of the technical ranges talks. Once it’s finalised with the IMF, then the additional taxation measures will be firmed up, so as to be unveiled thru the approaching mini-finances. In view of a loss of reconciliation over the figure of economic hole, the technical degree talks will maintain on Monday and then coverage level talks are anticipated to begin from Tuesday,” resources showed whilst speaking to a select institution of journalists inside the history discussions on Saturday.

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