If Pakistani authorities wish to restart the frozen loan programme, they must take the listed precondition activities within the next three weeks, according to the International Monetary Fund (IMF).
The IMF advised the Pakistani government that “all necessary initiatives” must be taken at this time.
Ishaq Dar, the minister of finance, is scheduled to meet with his core economic team in a few days to discuss the steps that must be taken in the next weeks to prepare for the resumption of the IMF programme.
In another round of virtual negotiations on Thursday, between representatives of Pakistan and the IMF, the finance minister gave the lender assurances that, despite the State Bank of Pakistan’s declining foreign exchange reserves, which fell to $6.11 billion, Pakistan was still anticipating dollar inflows from one friendly nation by late December or early January.
According to the sources, the Energy Ministry was urged by the Finance Ministry to modify the Circular Debt Management Plan (CDMP) for 2023.
According to one official, “we cannot allow the imposition of a power surcharge in the range of Rs 31.60 or Rs 12.69 per unit hike, keeping in view the attached political cost,” and they added that the appropriate authorities were tasked with developing the amended CDMP in such a way that Pakistan could increase the power tariff on the lower side.
According to unbiased analysts, the government may want to walk a tightrope by taking a balanced approach.
The government would need to come up with a workable plan to eliminate the monster of circular debt that has accumulated in both the power and gas sectors up to a staggering amount of Rs4 trillion because the restoration of the IMF programme through patchwork may not succeed.
The IMF has agreed to provide a Rs340 billion adjustment for the budget deficit increase brought on by expenses connected to the floods in the current fiscal year.
