The federal government and the International Monetary Fund (IMF) are close to finalising a staff-level agreement expected to range between $6-7 billion, sources in the Ministry of Finance said on Friday.
Both the sides are set to hold the last round of talks today in which the proposed bailout package would be finalised. The loan amount is expected to be around $6.4 billion for a three-year duration, the sources informed.
Under the proposed bailout agreement, Pakistan would have no choice but to concede to the IMF’s demands to hike power tariffs and taxes and withdraw tax concessions and exemptions – which are among the conditions that the country has accepted to secure the loan.
According to the ministry sources, the government would increase the costs of electricity and gas for the consumers in two phases within this year. New taxes amounting to Rs700 billion would be revealed in the budget for the next fiscal year, to be announced on June 11.
Budget deficit would be restricted to 4.5 percent, whereas the revenue target for the Federal Board of Revenue would be set at around Rs5.3 trillion. Interest rate would be brought up to 12 percent.
