IMF talks for third tranche begin today

The International Monetary Fund (IMF) would start today (Monday) discussions with Pakistan authorities over its second quarterly review of the US $6 billion Extended Fund Facility (EFF) amid revenue shortfall and power sector reforms challenge.

An official of Finance Ministry stated that "agenda is review of the government performance in terms of benchmarks and indicators". Fund's staff team would hold discussion with Pakistani authorities till February 14 and technical level discussion to be followed policy level talks, he added.

Sources said that during the technical level discussions exchange of data would take place relating to revenue collection as well as energy sector reforms particularly with regard to circular debt and tariff adjustment and other reforms agreed under the programme.

The staff level team would undertake its quarterly review on October-December 2019 and shortfall in tax collection and energy sector reforms are expected to dominate the discussion.

The Economic Coordination Committee (ECC) of the Cabinet has recently cleared amendments in Regulation of Generation, Transmission and Distribution of Electronic Power Act 1997. The government had given an undertaking to the IMF that it would submit to parliament amendments to the Nepra Act to (i) ensure full automaticity of the quarterly tariff adjustments and (ii) eliminate the gap between the regular annual tariff determination and notification by the government. Adviser to prime Minister on Finance Dr Abdul Hafeez Shaikh, Governor State Bank (SBP) Reza Baqir and Chairman Federal Board of Revenue (FBR) would head the policy level discussions with the IMF staff team.