After months of negotiations, Pakistan and the IMF have finally reached a consensus agreement on the bailout package for Pakistan.
Details of the three-year bailout package are to be announced soon.
The IMF’s delegation arrived in Pakistan on April 26 and has been here for 11 days. After multiple meetings with government officials, including officials from the provinces, it was expected that an announcement would be made that the package is finally ready.
Finance department officials declined to comment on the deal and said there could be an extension in talks.
It is expected that a three-year $6.5 billion package will be given to Pakistan. The government has already accepted most of the IMF’s terms, including increasing gas and electricity prices.
The new governor of the State Bank of Pakistan, Reza Baqir, will sign the agreement on Pakistan’s behalf.
From July 1, electricity is going to get more expensive and Rs600 billion in taxes will be imposed. The subsidy on electricity is being done away with except for consumers using less than 300 units and industries.
In the next stage, gas prices will be increased.
Another major point is that national institutions operating in a loss will be privatized. The privatization of national industries (like PIA and the steel mills) has been a hotly contested topic.
The IMF wants to see a decrease in the budget deficit.