ISLAMABAD: The fresh rounds of talks between Pakistan and the International Monetary Fund for the release of USD 1 billion loan tranche and a good economic certificate to the nation has remained inconclusive, a media report said on Sunday.
The talks held from October 4 to 15 failed to reach a staff level agreement because of differences over the macroeconomic framework and uncertainty over the future of Pakistan’s economy, The Express Tribune reported.
The talks failed despite Pakistan having implemented a prior condition of increasing electricity and petroleum products prices. However, both sides have shown resolve to remain engaged.
In his attempts to conclude talks on a positive note, Pakistan Finance Minister Shaukat Tarin met with IMF managing director Christalina Georgieva and US Assistant Secretary of State for South and Central Asia Donald Lu.
However, it seemed both these meetings also remained unproductive, the report said. “The IMF team remains engaged with our Pakistani counterparts on moving forward our work agenda and we are looking forward to our continued discussions with the Pakistani authorities on the set of policies and reforms that could form the basis for the completion of the 6th review under the EFF [Extended Fund Facility],” Teresa Dabán Sanchez, the outgoing resident representative of the IMF was quoted as saying to The Express Tribune.
It was for the second time that Pakistan and the IMF could not find “basis for the completion of the 6th review”, as its first attempt made in June also remained futile. Pakistan and the IMF have so far failed to agree on the Memorandum of Economic and Financial Policies (MEFP) — which becomes the base for the bailout programme.
The report, citing sources, said that both sides have not yet exchanged the final macroeconomic positions — a job that should have been completed on October 8. Pakistan and the IMF could not agree on the quantum of additional taxes and the roadmap for fiscal stability of the power sector, the sources added.
There were also issues about increase in gas prices and the measures needed to contain the current account deficit to a manageable level.
Pakistan had shared some statistics with the IMF on power and gas tariffs and tax collection and “they are validating the numbers we shared with them and will get back to us”, said Tarin while addressing a news conference in Washington at the conclusion of his visit.
Usually, the numbers are agreed upon, at least in principle, before the start of the policy-level talks. However, both the two sides did not exchange the critical tables related to the general government budget due to the nature of differences, the sources said.