Pakistan, IMF Facing Differences Over Bailout Programme

Pakistan and the International Monetary Fund (IMF) were facing differences over tough conditionalities on key areas of a bailout programme, including further increase in energy prices, more taxes and complete disclosure of Chinese financial support, a Minister said in Islamabad.

"There are still gaps in the position of the IMF and the position that we have," Finance Minister Asad Umar said after a series of meetings with an IMF team yesterday. 

He, however, said the talks were continuing positively and gaps reducing, reports Dawn news.

He said that $1 billion of the $3 billion committed by Saudi Arabia had been remitted to the State Bank of Pakistan yesterday and the remaining $2 billion would follow over the next few days.

Informed sources said the two sides had a wide gap in their positions on the need for increase in electricity tariff, upward revision in the revenue target and additional tax measures on matters relating to Chinese assistance and its impact - both inflow and outflow.

The sources said the IMF also demanded that the provincial governments finance the Benazir Income Support Programme (BISP), instead of the federal government, and wanted committed cash surpluses to minimise the consolidated fiscal deficit.

The two sides were expected to conclude the talks today.

The IMF mission also sought a complete market-based free float of the exchange rate and complete independence to the State Bank of Pakistan.