IMF 6th Review Talks Scheduled to Start on 4 October: Report

The International Monetary Fund (IMF) announced that upcoming discussions with Pakistan on the sixth review of its $6 billion loan program will take place on 4 October, reported The Express Tribune.

Previously, talks were expected to be held in the last week of September.

The IMF and Pakistan intend to discuss the disbursement of an additional $1 billion loan, proposed hikes in electricity tariffs, and the approval of the State Bank of Pakistan (SBP) Amendment Bill 2021.

If talks conclude successfully, Pakistan will be eligible to receive $1 billion by the IMF, $1.6 billion by the Asian Development Bank, and $1 billion by the World Bank, over the course of FY 2022.

The IMF and Pakistan also plan to discuss an Article-IV review, which would allow the IMF to conduct an assessment beyond the scope of the sixth review. If Pakistan receives a positive report through the Article-IV review, it would encourage foreign investor confidence and increased investment.

The sixth review of the loan program, which started in 2019, has been pending since March.

The review was delayed as officials were unable to come to an agreement over the IMF’s demand of an Rs. 4.95 per unit increase in electricity prices, and over the introduction of Rs. 150 billion worth of personal income tax.

The government has already increased average power tariffs by 40 percent or Rs. 4.72 per unit, to Rs. 16.44 in the past three years, said Additional Secretary Power, Waseem Mukhtar.

Meanwhile, the IMF and Pakistan will also discuss the recent SBP Amendment Bill 2021. The bill, which shifted the central bank’s primary objective to achieving price stability, and absolved it of the obligation to lend directly to the government, remains a controversial subject.

The IMF also appointed a new country head for Pakistan ahead of talks. European Commission Senior Economist, Esther Perez Ruiz, is due to replace the IMF’s current representative, Teresa Daban, when she completes her term in November.

Finance Minister Shaukat Tarin is due to visit Washington from October 11 to 17 to discuss important issues with IMF officials on the sidelines of annual meetings.