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Sat, May 11, 2019 12:12

Talks between IMF, Pak to continue for 2nd day Saturday

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The Government of Pakistan and the International Monetary Fund (IMF) will resume their talks regarding a bailout agreement on Saturday for the second day in Islamabad.

The Government of Pakistan and the International Monetary Fund (IMF) will resume their talks regarding a bailout agreement on Saturday for the second day in Islamabad.

The two sides held talks in the federal capital on Friday, after which the Ministry of Finance said they had made "good progress" in their discussions.

"Consultations will continue over the weekend," it added.

Sources in the Ministry of Finance had earlier informed that Pakistan and IMF were close to finalizing a staff-level agreement expected to range between $6-7 billion.

Under the proposed bailout agreement, Pakistan would have no choice but to concede to the IMF’s demands to hike power tariffs and taxes and withdraw tax concessions and exemptions — which are among the conditions that the country has accepted to secure the loan.

According to the ministry sources, the government would increase the costs of electricity and gas for the consumers in two phases within this year.

New taxes amounting to Rs700 billion would be revealed in the budget for the next fiscal year, to be announced on June 11.

The budget deficit would be restricted to 4.5 percent, whereas the revenue target for the Federal Board of Revenue would be set at around Rs5.3 trillion.

The interest rate would be brought up to 12 percent.

Under the proposed agreement, the government would not control the rate of the dollar, and subsidies in the energy sector, as well as other sectors, would be withdrawn.

Furthermore, the plan to privatize institutions incurring losses would be shared with the IMF.

The IMF and the Ministry of Finance would release a joint press statement if the agreement is finalized.

If no agreement is reached, both the sides would issue separate press releases, the sources had added. 

PM rejects draft of Finance Ministry, IMF's staff-level agreement

Prime Minister Imran Khan on Friday turned down the draft of a staff-level agreement between the Ministry of Finance and IMF, according to sources. 

Sources within the ministry said Pakistani officials and IMF had finalized the staff-level agreement, but PM Imran rejected the draft of the agreement between the two sides.

The prime minister wanted relaxation in IMF's conditions considering the issue of inflation in the country, they said.

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