Pakistan would formally request for a $5 billion fresh loan package from the International Monetary Fund (IMF) in policy level talks likely to begin from today (Friday).
Finance Minister Ishaq Dar would lead the Pakistani team and Frank Jeffery would lead the IMF delegation. Sources said Pakistan would formally request for a fresh loan of three to five billion dollars from the IMF, as already announced by the finance minister.
As Pakistan and the IMF are holding technical talks under Post Programme Monitoring (PPM) in Islamabad, officials of the finance ministry, economic affairs division and State Bank of Pakistan briefed the fund on Monday on budgetary targets and economic situation of the country.
Media reports said the government has assured IMF that it would achieve budgetary targets for the next financial year.
It informed the fund that the country would achieve GDP growth target of 4.4 percent, budget deficit of 6.3 percent and revenue collection target of Rs 2,475 billion in fiscal 2013-2014.
Sources said Pakistan might face tough conditions from IMF like imposition of reformed general sales tax (GST) and increase in power tariff for a new loan programme, which would be a challenge for the new government of Pakistan Muslim League-Nawaz (PML-N).
The visiting IMF team has so far taken a ‘soft stance’ on the promised fiscal adjustments of 2.5 percent of GDP by reducing the budget deficit from 8.8 percent in 2012-13 to 6.3 percent in the fiscal year 2013-14. The fund has extended its visit to Pakistan until July 4, starting from June 30. The commerce ministry on Monday briefed the IMF team on exports target of the country wherein SBP gave a briefing on the monetary policy of the country.
The finance minister was to leave for Dubai on Monday night to attend a two-day conference, which would be held jointly by the US Department of State and Pakistan’s Ministry of Commerce on June 25-26. He would join talks with IMF following his return to Pakistan.
Pakistan took $7.6 billion loan in 2008 under the SBA, which was later increased to $11.3 billion, but the country was not eligible for the last two disbursements of $3.2billion due to its failure to comply with performance criteria.
