Pakistan and the IMF have outlined more than 900 900 million in funding that will come after Pakistan withdraws its energy subsidies, a Pakistani source directly involved in the Qatar talks said on condition of anonymity.
Talks on resuming funding activities in Doha, the capital of Qatar, ended on Wednesday. An IMF official said in a statement that significant progress had been made, but stressed the need for Pakistan to remove fuel and energy subsidies to get back on track.
“When we raise fuel prices, the deal is done. We have outlined an agreement,” the source told Reuters in a text message after the talks in Doha.
The IMF representative in Pakistan did not immediately respond to a request for comment.
Pakistan entered into a three-year, $ 6 billion IMF deal in 2019, but about half of the funds have not yet been released.
The $ 900 million deferral depends on a successful IMF review. A successful review will also unlock other funding avenues for cash-strapped Pakistan, whose foreign reserves cover imports worth less than two months.
It is unknown at this time what he will do after leaving the post.
Pakistan’s ousted Prime Minister Imran Khan has introduced a cap on fuel prices amid mounting pressure to control rising inflation. The IMF on Wednesday said the move was a deviation from the policy agreed in the 2019 funding agreement.
The new government, which took office in April, is reluctant to lift fuel prices. However, the source said that finance officials are sure that they will be able to persuade Prime Minister Shehbaz Sharif to raise prices soon.
The Pakistani government convened a joint session of parliament on Thursday to discuss the economic situation after the talks, according to an order seen by Reuters.
Pakistan’s consumer price index rose 13.4% in April from a year earlier.
The removal of energy subsidies could have political consequences for the new coalition government, with elections expected in 16 months.
(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)