ISLAMABAD: Technical-level talks between Pakistan and the International Monetary Fund (IMF) team are said to have concluded on Monday while policy-level discussions will start from Tuesday (Feb 7).
Sources on condition of anonymity said the power sector’s untargeted subsidies were a major concern for the Fund as it wants to make the subsidies targeted. They added that according to the IMF, primary deficit was considerably higher compared to the government estimates.
Business Recorder tried to contact secretary finance and other senior officials to confirm whether technical-level talks had concluded or not but did not get a response from them. The finance ministry officials remained tight-lipped.
However, sources on condition of anonymity, said that power sector and primary balance remained major issues during technical-level talks. They added that now these would be taken up during the policy-level discussions to determine the revenue gap as well as with respect to tariff increase.
According to the officials, the IMF was displeased over providing subsidy to export-oriented sectors and wanted the government to withdraw it and sought an increase in general sales tax, ie, from 17 percent to 18 percent in view of revenue shortfall.
They added as per the IMF projection, primary deficit for the ongoing fiscal year would be around 0.9 percent of the GDP, whereas, the government projection was around 0.5 to 0.6 percent of the GDP.
Copyright Business Recorder, 2023