ISLAMABAD: Pakistan and the International Monetary Fund are on the brink of finalizing negotiations, with expectations high for the signing of a Standby Arrangement (SLA) worth $1.1 billion, marking significant progress in their ongoing discussions.
The conclusion of talks signals the impending finalization of the Memorandum of Economic and Financial Policies, a pivotal step towards cementing the SLA agreement. Sources close to the negotiations express optimism about reaching a staff-level agreement on the last day of discussions, paving the way for the IMF’s Executive Board’s approval of the final tranche in April.
Coinciding with the annual meetings of the IMF and the World Bank in Washington, scheduled to commence on April 15th, Finance Minister Mohammad Aurangzeb is poised to lead a delegation to the U.S. capital, signaling Pakistan’s intent to pursue a new and larger loan program to bolster its financial stability. The ongoing talks between Pakistan and the IMF have seen significant strides, with the Pakistani government committing to crucial economic reforms, including timely increases in electricity and gas tariffs, as well as the abolition of tax exemptions.
The Finance Ministry has disclosed plans for further increases in electricity tariffs effective from July 1, alongside the implementation of measures for regular adjustments to facilitate cost recovery. Moreover, Pakistan has pledged to digitize its tax system, a move aimed at enhancing efficiency and revenue collection. This decision underscores the country’s commitment to modernizing its tax infrastructure and fostering economic development.
