ISLAMABAD: The ‘crucial’ talks between Pakistan and the International Monetary Fund (IMF) will start from Tuesday (today), as the IMF team under the supervision of mission chief to Pakistan Nathan Porter has reached Islamabad.
A senior official of the Ministry of Finance said that the IMF team has reached Islamabad and meetings between both sides will start tomorrow morning.
Both sides will officially start negotiations in order to complete the ninth review of the Extended Fund Facility (EFF) program.
The technical discussions will start from Tuesday and it will continue till Friday. A source inside the Ministry of Finance said that during the technical negotiations, both sides will exchange information.
He further added that the policy level talks between both sides start from next Monday. The Pakistani Finance minister, Secretary Finance, Chairman FBR and Governor State Bank of Pakistan will participate in these meetings.
He said that reforms are inevitable as the government cannot give subsidies on gas and electricity to rich people.
He added that the burden of reforms would affect every segment of society but the lower and middle income group will be more affected the most.
The IMF has decided to send its mission to Pakistan only after the government agreed to implement tough conditions and the government has no other option but to implement these conditions, he added.
In line with the IMF conditions, the Pakistani Rupee continued its free fall against the dollar from where it left off on Friday. The interbank exchange rate of the State Bank, went up to 269.6 increasing by another 2.6%. The open market exchange rate was offered as high as Rs. 275/USD. During the last week, the rupee has come from 230 to 270, in the interbank exchange.
The government also passed on the impact of the depreciation of rupee, onto the consumers in the form of a raise in the petroleum price. On Sunday, the prices of petrol and diesel were increased by Rs. 35 each, taking them to their highest ever level in the history of Pakistan.
The senior official inside the Finance Ministry also said that the gap between expenditure and revenue has been increasing day by day and the government does not have the choice, but to increase power and gas tariff as well as to impose more taxes.
Answering a question about the possibility of a mini budget, he said that new taxes would have to be imposed but the quantum would be decided during the talks.
He said that there will be equal pressure on the IMF, because it would be surprising for everyone if a country defaults while being a part of the fund’s program.
