Islamabad: Pakistan Prime Minister Shehbaz Sharif on Friday held talks with International Monetary Fund (IMF) chief Kristalina Georgieva to break the impasse over releasing the next tranche of aid to the cash-strapped country. The contact was made four days before the one-on-one meeting between the Prime Minister and the IMF chief on the sidelines of the Geneva Convention for Flood Victims.
Addressing a business gathering here on Friday, Sharif confirmed that he received a call from IMF Managing Director Georgieva and they discussed the issue of disbursement of pre-pledged loans.
He said, “I told the IMF that we cannot put more burden on our people. I also urged that the IMF should send its delegation to Pakistan for talks.” Discuss various issues.
The global lender has refused to release a fresh tranche of the previously agreed loan as Pakistan was not living up to the promises it made while restoring the USD 6 billion stalled loan last year.
Prime Minister Sharif sought exemption in demand for an increase in electricity prices to compensate for deviations from the annual circular debt management plan of about 500 billion rupees.
These are the major hurdles in reaching an initial understanding of a staff-level visit by the IMF to Pakistan.
“However, the government is open to imposing a flood levy and windfall income tax on commercial banks,” sources said. There was also a pledge from Pakistan side to hike energy prices against any further deviations in future.
Pakistan and the IMF held several rounds of talks on November 18 last year, but could not finalize the schedule for formal talks on the overdue ninth review. The IMF board had approved the seventh and eighth review of Pakistan’s bailout program in August last year, allowing the release of over USD 1.1 billion.
The much-anticipated bailout package from the IMF helped Pakistan avert an imminent default amid persistent political uncertainty and devastating floods that displaced more than 33 million people.
As the economy remains under pressure, the premier also called on Chinese counterpart Li Keqiang, seeking Beijing’s help to avert a default, while army chief General Asim Munir met the Saudi defense minister in Riyadh.
The contacts were made as official foreign exchange reserves fell to USD 5.6 billion.
A day earlier, Finance Minister Ishaq Dar, who appeared as an alternative to the IMF, vowed to raise the money through asset sales, expected to receive a second bailout of USD 3 billion from Saudi Arabia. Low foreign exchange reserves.
But the Saudi cash aid may only delay the default, as it may not solve the problem permanently.
The Finance Minister had said that the government is committed to the IMF programme.
But at the same time, he added: “We will not take measures that increase the burden on the common man.”
The IMF had previously called for a plan to eliminate circular debt of an additional 500 billion rupees, increase energy prices, introduce new taxes, restore the rupee to its real value and achieve primary budget surplus targets, flood Excluding the expenditure related to the terms, the Express Tribune reported that it would fuel inflation which is already at 25 per cent.