With high hope, Tarin leaves for US for IMF, World Bank annual meetings

Finance Minister Shaukat Tarin has left for Washington DC today (Tuesday) to attend the annual meeting of the World Bank and International Monetary Fund (IMF) scheduled from October 11 to 17.

Tarin will also participate in policy level talks, amid hope that successful conclusion of negotiations would result in the IMF releasing the disbursement of 750 million SDRs (roughly $1 billion).

Talks at the technical level, which concluded last Friday between Pakistani authorities and the IMF, reportedly remained inconclusive on the pace of power sector reforms with the latter reportedly expressing concern over the non-implementation of the tariff agreed during the second to fifth review talks held in February 2021.

PEN reported that power sector reforms remained the major bone of contention during the technical level talks and the government was unable to convince the Fund of its ability to implement the circular debt management plan designed to arrest the mounting circular debt.

During the fifth review, Pakistan had pledged to increase electricity tariffs by Rs1.39 per unit from June 1, 2021 as the second phase of Nepra’s determined tariff of Rs 2.34 per unit, of which Rs 1.95 per unit hike has already been implemented.

The country’s circular debt reached Rs2.234 trillion as of July 21, from Rs2.208 billion in July 20. Recovery, on the other hand, declined in FY2020-21 as compared to FY2019-20.

Shortly after being appointed, Tarin made it clear that the government would not increase the base tariff as industrial, commercial and domestic consumers could not bear the brunt.