ISLAMABAD: Pakistan and the visiting IMF Mission have made good progress in their discussions while consultations will continue over the weekend.
Earlier, today both sides held talks in which the proposed bailout package was discussed. The loan amount is expected to be around $6.4 billion for a three-year duration, the sources informed.
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 finance 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.
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. 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would not control the rate of the dollar, and subsidies in the energy sector as well as other sectors would be withdrawn.