International Monetary Fund (IMF) and Pakistan agreed to raise salaries and pensions in budget talks.
According to details, Electricity and gas will not be increased until October 2020.
Alternative revenues have been agreed to control the budget deficit. According to sources in the Ministry of Finance, the IMF has agreed to provide relief in the first quarter of the next financial year and agreed on alternative revenues to control the budget deficit. The IMF has been assured that Pakistan Taxes will increase revenue.
As per the consensus, the conditions of IMF related to the loan agreement, would remain relaxed till September 30, and after October, Islamabad will fulfill the conditions which are linked with the Extended Fund Facility (EFF) .
According to sources, the IMF will relax the conditions till the first quarter of the next financial year and the federal government will control the condition of not borrowing from the State Bank of Pakistan.
Finance Ministry officials assured the IMF that most of the terms of the current loan program would be met after October. Pakistan will stick to the existing loan program.
Earlier on June 6, Director Communication Department IMF Gerry Rice stated that the IMF and Pakistani authorities remain closely engaged to bring the second review of the EFF to a positive conclusion, while taking into account the new conditions the fund is facing in Pakistan, and to ensure the programme delivers on 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.
The IMF has already provided emergency financing of about $1.4 billion in April this year, in a bid to help the country deal with the COVID-19 crisis.
The Pakistan government is set to release the budget for the next year on June 12.