KARACHI: Pakistan and an IMF mission are due to begin talks on Tuesday to review the country's economic performance for the possible release of the sixth tranche of a bailout programme, a source involved with the talks said.
In December, the International Monetary Fund (IMF) approved a nine-month extension of Pakistan's loan, which was due to end last year, to give authorities time to complete the implementation of key fiscal reforms.
The extension runs to Sept. 30, 2011.
The sixth installment of a $11 billion loan that has kept Pakistan's economy afloat since November 2008 has been delayed since August 2010, because of the slow implementation of fiscal reforms.
A key condition for the release of the sixth tranche is the implementation of a reformed general sales tax (RGST), meeting the requirement by the IMF and international donors that Pakistan tax more of its economy.
Pakistan's tax-to-GDP ratio is only about 10 percent, one of the world's lowest.
But the implementation of a RGST could deepen public frustrations with the unpopular government.
Analysts say that if a RGST is not implemented, Pakistan's government will have to propose other ways to raise enough revenue to the IMF team, who are expected to be in Pakistan until March 8.
In May, Pakistan received $1.13 billion in the fifth tranche.
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