IMF and Pakistan decided to increase wages and pensions in budget talks.
Electricity and gas will not be increased until October 2020, according to reports.
Alternative revenues for controlling the budget deficit were agreed. The IMF has agreed to provide relief in the first quarter of the next financial year, according to sources within the Ministry of Finance, and has decided on alternative revenues to manage the budget deficit. The IMF is confident that revenue will increase with Pakistan Taxes.
According to the consensus, the terms of the IMF relating to the loan agreement would remain relaxed until September 30, and after October, Islamabad will fulfill the terms of the Extended Fund Facility (EFF).
Sources say that the IMF will relax the conditions until the first quarter of the next financial year and the federal government will control the state bank of Pakistan’s not borrowing condition.
The IMF was assured by officials from the Ministry of Finance that most of the terms of the current loan program would be met after October. Pakistan must stick to the new loan plan.
Earlier on June 6, IMF Director of Communication Gerry Rice stated that the IMF and Pakistani authorities remain closely committed to bringing the EFF’s second review to a positive conclusion, while taking into account the new conditions that the fund is facing in Pakistan, and ensuring that the program is meeting its objectives.
“On the EFF, which was already in place with Pakistan, I can tell you that technical discussions with the authorities continue. They remain fluid with a view to bringing that second review of that program, that EFF, to a positive conclusion, as soon as possible. We’re working with the authorities, constructively, to ensure that that can be brought to a positive conclusion, as soon as possible, while taking into account the new conditions that we’re facing in Pakistan, and to ensure the program delivers on its objectives,” he said.
In April this year, the IMF has already received around $1.4 billion in emergency funds, in a bid to help the country cope with the COVID-19 crisis.
Pakistan’s government is set to release the next year’s budget on 12 June.