ISLAMABAD: Finance Adviser Shaukat Tarin on Wednesday said the government was still reeling from the conditions met to receive the previous loan tranche of $500 million from the International Monetary Fund (IMF), dropping a hint as to why talks with the global lender could not be concluded.
“I am still facing the brunt of the previous $500 million tranche,” Tarin told journalists while addressing a news conference, along with Energy Minister Hammad Azhar, to share the details of the $4.2 billion one-year loan deal between Pakistan and Saudi Arabia.
The finance adviser clarified that the $4.2 billion bailout package that the Riyadh had agreed to give to Islamabad “has nothing to do” with the delay in the finalisation of the IMF deal.
Tarin added that “one or two outstanding issues” remained between Pakistan and the global lender for the conclusion of the 6th review, without elaborating anything about them.
The completion of the review will pave the way for the release of the $1 billion next tranche in addition to the $1.6 billion injection by the World Bank and Asian Development Bank.
IMF Resident Representative Teresa Daban did not comment on the question as to whether or not Pakistan took the global lender into confidence before securing a $4.2 billion short-term deal from the Kingdom but only said that “discussions and the understanding will continue”.
The IMF monitors Pakistan’s inflows in the context of overall debt sustainability of the country.
To qualify for the $500 million tranche that the IMF disbursed in April this year, Pakistan had accepted five prior actions.
They included the imposition of income tax to the tune of Rs140 billion, submission of a controversial State Bank of Pakistan amendment bill in the parliament and changes to the National Electric Power Regulatory Authority (NEPRA) Act to automatically increase electricity prices.
The other two conditions were Rs1.95 per unit increase in electricity prices and the approval of the Circular Debt Management Plan envisaging further increase of Rs5.65 per unit.
While responding to a question, the adviser assured that talks with the international lender were in the final phase.
“We will have to rationalise taxes, but I will not give any further details,” the finance adviser replied to a question about withdrawing sales tax exemptions on the IMF demand.