IMF urges Pakistan to bring reforms to energy sector
May 11, 2024
Islamabad [Pakistan], May 11 : The International Monetary Fund (IMF) has urged Pakistan to bring "strong cost-side reforms" to restore the viability of the country's energy sector, reported ARY News.
The global lender, in its staff report for the second and final review under the USD 3 billion stand-by arrangement, said that Pakistan should be able to meet its fiscal year 2023-24 circular debt management plan (CDMP) target of Rs 2.3 trillion with zero net zero stock accumulation.
"Timely notification of the FY25 annual rebasing will be critical to the continued prevention of further circular debt flow, as will further collection efforts, including steps to enhance and institutionalize digital monitoring," the IMF said in its report.
"In parallel, the authorities should press ahead with agricultural tube well subsidy reform, for which a finalized plan is targeted by end-FY24."
"Delays in post-program external financing disbursements would also place further pressure on banks to finance the government (further exacerbating crowding out of the private sector). Geopolitically driven higher commodity prices and disruptions to shipping, or tighter global financial conditions, would also adversely affect external stability," the IMF added.
Moreover, the global lender has also called on Pakistan to end power subsidies given to the industry sector in the upcoming financial year 2024-25 budget, ARY News reported.
Notably, the technical experts' team of the International Monetary Fund (IMF) has arrived in Islamabad for talks on a fresh loan programme and budget preparations.
The team will stay in Pakistan for over 10 days, while other members of the IMF mission are likely to reach Pakistan on the night of May 16, according to the sources.
Moreover, the mission will hold talks with Islamabad for a fresh loan programme, as reported by ARY News.
Earlier, the sources said that the government had expedited preparations for the budget targets before the arrival of the IMF mission.
In this regard, the Ministry of Finance has directed relevant ministries to complete targets expeditiously.
The sources stated that the framework for all important budgetary targets would be prepared and sent to the IMF.
The approval of a strategic paper on the FY25 budget will also be sought from the federal cabinet before the arrival of the IMF mission, reported ARY News.
