Pakistan fails to strike agreement with IMF under USD 6 billion Extended Fund Facility
Oct 17, 2021
Islamabad [Pakistan], October 17 : Unable to reconcile and evolve consensus on the Memorandum of Economic and Financial Policies (MEFP), the International Monetary Fund (IMF) and Pakistan have so far failed to strike a staff-level agreement under USD 6 billion Extended Fund Facility (EFF), reported local media.
Islamabad expects the finance secretary to prolong his stay in Washington DC for the next few days for making last-ditch efforts to reconcile and evolve consensus on the MEFP and completion of 6th and 7th reviews to pave way for the approval of USD 1 billion tranche under the EFF programme.
The IMF staff is still dissatisfied with Pakistan's macroeconomic framework under the MEFP and without agreement over it, despite the government raising electricity tariff by Rs 1.39 per unit on average for baseline tariff, raising POL prices by Rs 10.49 for petrol and Rs 12.44 for diesel.
Calling it a worrisome development, sources have said that the IMF staff was so far busy in number-crunching mainly on fiscal framework, external front and power sector.
On Friday, the country's government had increased the base power tariff by Pakistani Rs 1.39 per unit to fulfil IMF demand to stay in its programme. The increase will become effective from November and continue till the end of the financial year, June 2022, according to The News International.
