The International Monetary Fund has rejected Pakistan’s proposed Circular debt management plan (CDMP) and called for an increase in electricity tariffs as the Pakistani economy plunges. Citing local media outlets, ANI reported that the International Monetary Fund review mission has rejected Pakistan’s plea and urged the Shehbaz Sharif administration to increase the electricity tariffs and restrict the additional subsidy at Pakistani Rupees (PKR) 335 billion for the current fiscal year.
On Monday, a delegation from the International Monetary Fund Review Mission led by Nathen Porter landed in Islamabad to review the deplorable conditions of the Pakistani economy and start some negotiations for a bailout package. According to ANI, the delegation asked the Pakistani administration to increase the electricity tariff in the range of PKR 11-12.50 per unit.
IMF called the Pakistani CDMP “unrealistic”
According to ANI, the IMF called the proposed plan “unrealistic”, and stated that it is made on the basis of “certain wrong assumptions”. As per the reports, the Pakistani government will also have to make changes in its policies to restrict the losses of the power sector. Meanwhile, the IMF and Pakistan’s Ministry of Defence will work out fiscal gaps and several; additional taxation measures will be finalised soon. According to ANI, the Pakistani government shared the CDMP with the International body and called for an increase in the circular debt to the tune of PKR 952 billion. In 2019, former Pakistani Prime Minister, Imran Khan negotiated a multi-billion-dollar loan package from the IMF. However, even that negotiation didn’t turn out to be fruitful and eventually stalled. Hence the Pakistani administration is in deep waters as they struggle to stabilise their economy.