ISLAMABAD: Talks between Pakistani officials and the International Monetary Fund (IMF) are “moving forward positively” and will form the basis for the completion of the 6th review of a $6 billion loan program, the Pakistan ministry of finance has said, adding that talks would resume today, Monday.
In 2019, Pakistan reached an accord with the International Monetary Fund for a three-year, $6 billion bailout package aimed at shoring up fragile public finances and strengthening a slowing economy. Pakistani and IMF officials are currently engaged in a fresh round of talks for the release of a $1 billion tranche of the loan.
Five reviews of the program had been completed by March. The sixth is pending since June this year, which, if completed, will enable Pakistan to receive around $1 billion from the fund.
“Fund and Pakistani authorities will resume the talks on Monday [October 18, 2021] from where they were left on Friday,” Muzzamil Aslam, spokesperson for the finance ministry, said in a statement on Sunday. “There is no truth in the news of talks’ failure.”
Negotiations between Pakistan and the IMF are being led by secretary finance division, Yusuf Khan, in Washington, and are “moving forward positively,” the statement said: “No timeframe was set at any stage for conclusion of the talks. The negotiations with the IMF will continue till the successful conclusion.”
The clarifications from the finance ministry came after local media reported that talks between the fund and Pakistan had concluded on Friday and failed.
Experts said talks may have stalled due to the government’s resistance to the IMF’s demand to increase energy prices even further. A hike of Rs 1.39 per unit was announced last week.
Pakistani Finance Minister Shaukat Tarin has been a staunch opponent of power tariff hikes and personal taxes but has showed some flexibility in recent weeks.
“The other stumbling block is the IMF’s insistence to increase the revenue generation target close to Rs 500 billion in addition to the revenue collection target of Rs 5.8 trillion,” Dr. Vaqar Ahmed, joint executive director at the Sustainable Development Policy Institute (SDPI), told Arab News. “This would not be an easy decision to take by the political government under current circumstances.”