Internati-onal Monetary Fund (IMF) has reportedly sought financial stability timeframe and economic revival plans from Pakistani authorities in addition to measures being taken to reduce unprecedented trade deficit through increase in exports, well informed sources told Business Recorder.
An IMF delegation headed by Mission's Chief Harald Finger flanked by IMF Resident Representative Teresa Darban Sanchez held a detailed meeting with the Prime Minister's Advisor on Commerce, Textile, Industries and Production and Investment Abdul Razak Dawood and discussed different issues relating to the economy. Secretary Commerce, Younus Dagha and Director General Trade Policy, Muhammad Ashraf also accompanied the Advisor.
According to sources, IMF Mission asked Commerce Ministry's team when Pakistan is expected to achieve financial stability and what is the economic plan of the incumbent government. On this Commerce Ministry team replied that the government is adopting different measures to achieve financial stability. Commerce Ministry also informed the Mission that incumbent government is finalizing an economic plan.
IMF Mission was informed that Commerce Division has prepared a five year Strategic Trade Policy Framework (2018-23) which is expected to be considered by the federal cabinet very soon.
Briefing the mission on the five-year National Tariff Policy (2018-23) the Commerce team stated that it would make tariff structure a true reflection of trade policy priorities and improve competitiveness through duty-free access to imported raw materials.
"Rationalizing tariff structure for enhancing efficiencies and reducing relative "disincentives" for the exporting activities and removal of anomalies in tariff structure is also part of the National Tariff Policy," the sources quoted Commerce Division officials as saying.
However, Commerce Division officials did not indicate at any stage that Pakistan needs a bailout package from the IMF, the sources maintained.
Prime Minister's Advisor also briefed the IMF Mission about the measures being taken to reduce trade deficit and imports in addition to CPEC-related investments to boost trade volume and investments.
Commerce Division has proposed export target of $ 46 billion for the new five-year STPF, which is yet to be cleared by the Prime Minister as Minister in-charge of Commerce Division.
Meanwhile, Ministry of Energy has provided details about progress on China Pakistan Economic Corridor (CPEC) projects in the energy sector, including type of projects and financing modalities, envisaged CPEC projects for FY 2018/19 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).
Power Division has also provided 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 had also sought data on flow of new arrears at end-December 2017 and end-June 2018 and contributing factors including: (i) non-recoveries;(ii) accrued mark-up;(iii) line loses;(iv) GST non-refund;(v) late payment surcharge;(vi) reasons of delay in tariff determin-ation;(vii) operational deficit/ surplus of the system;(viii) impact of oil prices; and (ix) stock clearance.
"We have also provided data on electricity subsidies by end-June 2018 along with data on the estimated needs for budgetary power subsidies in FY 2018/19," said an official of Power Division.
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