The recent Pakistan IMF talks stood at an impasse due to difference of assertions from both sides in the Memorandum of Economic and Financial Policies (MEFP). The current discussion is about the release of the $1 billion tranche under the EFF program.
Pakistan has fulfilled most of the requirements of the IMF, which have not been easy to enforce especially in a COVID environment. The most recent adjustments are raising electricity tariffs by Rs. 1.39 per unit and raising POL prices by Rs. 10.49 for petrol and Rs12.44 for diesel. Despite this compliance, the IMF is still unsatisfied with the macroeconomic framework under the MEFP meaning the staff level agreement will not be possible which will put the tranche in risk. The IMF has been busy assessing in particular the fiscal framework, external front and power sector.
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