ISLAMABAD (Eshfak Mughal):- Pakistan and the International Monetary Fund (IMF) is likely to sign a Staff Level Agreement next week.
Sources said that Pakistan took advance steps such as increasing tariff of gas as well as electricity besides presenting Finance supplementary bill 2023 worth Rs170 billion to meet IMF conditions.
Sources said that the IMF was pushing Pakistan for Energy sector reforms due to which, government has approved revised circular debt management plan, worth Rs952 billion to curtail the mounting circular debt.
Sources further said that there is no direct link of the mini budget with new taxes but to fund power losses adding that they said that the economy will be destroyed if Pakistan cannot overcome the energy sector losses.
Sources said that Pakistan and IMF have also reached an understanding to reduce expenditure, except on debt servicing.
The IMF has not only asked for a market determined exchange rate but to give autonomy in deciding independent monetary policy in order to control inflation, sources added.
Sources said that IMF has also asked for 10 billion dollar foreign reserves, equivalent two months imports, till June 2023 besides also agreed 29% inflation as well as 2percent growth rate during this fiscal year.
Sources also said that the Prime Minister of Pakistan has given assurance to the IMF for implementing the agreed reforms agenda.
The Executive Board of the IMF will approve the $1.1 billion tranche three to four weeks after the staff level agreement, sources added.
The ongoing IMF’s current loan program will expire on June 30, 2023 after receiving a $2.5 billion loan and If necessary, Pakistan will have to make a new application for the new loan program in the next financial year, sources said.