An International Monetary Fund (IMF) Mission is visiting Islamabad from September 26 to October 04, 2018 for consultation with new economic team led by Finance Minister, Asad Umar under Article IV consultations.
There are speculations in the federal capital that Pakistan may ask the Fund for a new program to improve its depleting foreign exchange reserves if friendly countries like Saudi Arabia and China are unwilling to extend financial assistance of about $ 8-10 billion - an amount required to maintain our reserves and bridge the gap between exports and imports for at least three months.
The Mission sources said has already sent its questionnaire to the Ministry of Finance in which performance of different sectors has been sought. The IMF Resident Representative to Pakistan has already held discussions with the high ups of different Ministries.
Ministry of Finance has sent letters to all the concerned Ministries including Ministry of Energy, Ministry of Commerce and Revenue Division and sought information to be shared with the Mission during a week-long parlay.
In March 2018 Fund had stated that macroeconomic stability gains achieved during the 2013-16 EFF have been eroding, putting this outlook at risk. The current account deficit has been quickly widening, reflecting strong domestic demand amid an overvalued exchange rate, fiscal slippages, and an accommodative monetary policy stance.
Pakistan's technical team would be headed by Finance Secretary, Arif Ahmad Khan, Governor State Bank of Pakistan (SBP), Tariq Bajwa and Chairman Federal Board of Revenue, Jehanzeb Khan, besides senior officials from Ministry of Privatisation, Ministry of Energy i.e. Petroleum Division and Power Division.
Ministry of Privatisation would submit details of future privatisation plan of power sector entities, PSM, OGDCL, gas companies and PIA.
The Ministry of Energy has been asked to provide details about advancement on China Pakistan Economic Corridor (CPEC) projects in the energy sector, including type of projects and financing modalities, envisaged CPEC projects for FY 1018/19 and over the medium term, modalities of power purchase for CPEC and other power additions, including government power purchase guarantees, for Independent Power Producers (IPPs).
According to sources Ministry of Finance has conveyed to Ministry of Energy (Power Division) to provide information on main measures envisaged to ensure cost recovery in the power sector and eliminate the flow of circular debt.
Power Division has also been directed to provide data from end December 2017 to end-June 2018 and the latest data on stock of arrears in the power sector as well as arrears held in PHPL estimated at Rs 1.2 trillion.
Finance Ministry has also sought data on flow of new arrears at end-December 2017 and end-June 2018 and contribution factors including: (i) non-recoveries;(ii) accrued mark-up;(iii) line loses;(iv) GST non-refund;(v) late payment surcharge;(vi) reasons of delay tariff determination;(vii) operational deficit/ surplus of the system;(viii) impact of oil prices; and (ix) stock clearance.
Ministry of Energy has been asked to provide data on electricity subsidies by end-June 2018 along with data on the estimated needs for budgetary power subsidies in FY 2018/19.
On September 6, 2018, Director IMF's Communication Department, Gerry Rice said in reply to a question sent by Business Recorder that Pakistan has not formally approached IMF for a new program.
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