IMF talks near completion, paving way for $1.2bn P...

Summary

• Pakistan and the Fund have also agreed to accelerate preparations for targeted gas subsidies through the social protection system.
• The government plans to use the Benazir Income Support Programme (BISP) to provide targeted assistance to low-income electricity consumers from January next year after the revised base tariff is introduced.
• Under an IMF structural benchmark, Pakistan must introduce a major reform by January 2027 to replace the existing tariff-differential and cross-subsidy arrangements with a targeted subsidy system for low-income consumers through BISP.

AI Generated Summary

Pakistan’s discussions with the International Monetary Fund (IMF) are expected to conclude successfully this week, potentially clearing the way for the release of around $1.2 billion under the ongoing $7 billion Extended Fund Facility (EFF) and $1.4 billion Resilience and Sustainability Facility (RSF).

Officials are now finalising the Memorandum of Economic and Fiscal Policies (MEFP) after reaching broad agreement on the main issues covered during the latest review. The IMF mission, led by Iva Petrova, is expected to complete its visit within the next few days.

Sources said the Fund had not introduced any major new conditions. Instead, discussions focused on corrective measures to address earlier shortcomings. The government’s overall revenue target remains unchanged, with greater emphasis being placed on meeting the half-yearly collection goal after tax revenues surpassed the first-quarter target.