Thursday, 23 June, 2022 I 23 Dhul-Qadah, 1443 I Rs 15.00 I Vol XII No 354 I 12 Pages I Lahore Edition
Govt, IMF yet to develop understandInG on power subsIdIes, prIMary balance Parleys with TTP to be carried out within constitutional ambit, says Sanaullah islamabad staff report
islamabad
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shahzad paracha
HE government and International Monetary Fund (IMF) have yet to develop a comprehensive understanding on power sector subsidies and primary balance. Sources said that the government has not reached an agreement with the Fund on power sector subsidies. The Fund has expressed concerns over provincial surplus as it would not be achievable given the budgets presented by the provinces. As a result, the government would not be able to achieve the primary surplus of around 0.2 to four percent in the next fiscal year from the existing negative by 1.6 percent even if the federal board of revenue tax collection is increased. Sources also said that the Fund is not ready to believe the budgetary numbers and stated that the budget was not based on real expenditures,
which means that the actual figure of the inflation was not taken into account. Thus the Fund believes that expenditures in the budget for the next fiscal year are understated on the various accounts. Pakistan Bureau of Statistics under the alleged influence of the incumbent government is preparing a consumer price index based on those products or items which Utility Store Corporation is selling at subsidised rates and IMF has shown concern over this methodology. Sources said that government wants to control the rising price of the dollar so that’s why the economic team in late-night fed the information to give a positive impression to the market. Another senior official of the finance ministry said that it will take another one week to reach an agreement with the IMF and the Finance minister will announce these measures in the windingup speech. It was reported that Pakistan and IMF reached an understanding on the
federal budget for 2022-23 after authorities committed to generate Rs436 billion more taxes and increase petroleum levy gradually up to Rs50 per litre. In addition, the IMF mission will finalise monetary targets with the State Bank over the next couple of days and, in the meantime, share the draft of a Memorandum of Economic and Financial Policy (MEFP). Sources said that IMF has asked Pakistan to take additional revenue measures in order to achieve the next year’s revised Rs7.4 trillion revenue target. It was also reported that the government agreed to impose one percent poverty tax on firms earning Rs150 million, two percent on those earning Rs200 million, three percent on over Rs250 million and 4 percent on Rs300 million above. Former finance minister Shaukat Tarin on Wednesday also said that a potential deal with the IMF for the revival of the Extended Fund Facility (EFF) was still weeks away.
Interior Minister Rana Sanaullah and Minister for Information and Broadcasting Marriyum Aurangzeb on Wednesday said that dialogues with the outlawed Tehreek-e-Taliban Pakistan (TTP) will be carried forward following ownership of the parliament and within the Constitutional ambit. “Any final decision in this regard will be made within the contours of the Constitution and the approval of parliament,” Interior Minister Rana Sanaullah and Minister for Information and Broadcasting Marriyum Aurangzeb informed while addressing a press conference after in-camera meeting of the National Security Committee (NSC). Both the ministers said that Prime Minister Shehbaz Sharif will take the parliamentarians into confidence regarding the NSC meeting in an in-camera session of parliament to be held soon. Talking about the NSC meeting, they said that an in-camera meeting of the National Security Committee (NSC) held a detailed discussion on the talks with the banned Tehreek-eTaliban Pakistan (TTP) and the situation along the Pak-Afghan border. The participants met in Islamabad on Wednesday with Prime Minister Shehbaz Sharif in the chair. National, parliamentary and politi-
Pakistan signs $2.3bn loan facility agreement with Chinese consortium of banks islamabad staff report
Pakistan has signed a $2.3 billion (RMB 15 billion) loan facility agreement with a Chinese consortium of banks. In a message posted on Twitter, Finance Minister Miftah Ismail said that the inflow is expected within a couple of days. It is pertinent to note that Foreign exchange reserves held by the State Bank of Pakistan (SBP) dipped below $9 billion on June 10. The central bank reserves are currently at their lowest level since November 22, 2019. Meanwhile, Foreign Minister Bilawal Bhutto-Zardari also expressed his gratitude to the Chinese leadership. "The people of Pakistan are grateful for the continued support of our all-weather friends," he said. Earlier this month, the finance minister had shared the "good news" that the terms and conditions for refinancing the deposit by Chi-
nese banks had been agreed. At the time, he said the loan would help "shore up our foreign exchange reserves". On June 2, while addressing a
press conference, Ismail had said that China had withdrawn the loan on March 25 and set tough conditions under which Pakistan could not utilise those funds.
However, he went on to say that after a visit by Foreign Minister Bilawal Bhutto-Zardari and follow-up discussions by Prime Minister Shehbaz Sharif with Prime Minister Li Keqiang, the Chinese side had not only agreed to roll over the amount but also done so at a cheaper interest rate of 1.5pc plus Shanghai Interbank Offered Rate (Shibor) instead of earlier 2.5pc plus Shibor. In today's announcement, Ismail did not elaborate further on the agreement with the consortium. The development comes after reports emerged of Pakistan reaching an understanding with the International Monetary Fund (IMF). It will also prop up Pakistan's dwindling cash reserves which are at $8.99 billion, as per data from the central bank. Previously, the minister had said that a deal with the IMF would pave the way for receiving loans from other multilateral organisations. Even China had linked any loan with the revival of the IMF programme, he said in May.
cal leadership, members of parliament and the military leadership attended the NSC meeting. Those in attendance were briefed about the overall security situation including the internal and external security threats, and the steps being taken by security institutions to deal with them. The meeting was briefed about the background of talks with the TTP and the different phases of it. The talks, participants were informed, are facilitated by Afghan authorities and negotiations are being held within the framework of the Constitution. The political leaders expressed their satisfaction over the strategy and progress made in this regard so far. The meeting was also briefed on the administrative matters of the PakistanAfghanistan border. The leadership expressed the confidence that the Afghan soil won’t be allowed to be used against Pakistan. It noted that the country’s sacrifices in the war against terror had been acknowledged by the world. The participants also noted that there was no organised network of terrorists in the country. Rana Sanaullah and Marriyum Aurangzeb told the media that that Prime Minister Shehbaz Sharif will soon take the parliamentarians into confidence regarding the NSC meeting.
CONTINUED ON PAGE 05
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