Power Minister Khurram Dastgir shared that Pakistan is on the verge of sealing a deal with the International Monetary Fund (IMF) as consensus had been achieved on almost all issues between the two sides.
Pakistan — with a $350 billion economy — is seeking a crucial instalment of $1.1 billion from the IMF to avoid default. The Fund has worked out a larger gap of approximately Rs900 billion, equivalent to 1% of the gross domestic product (GDP) — a major stumbling block in striking a staff-level agreement.
The IMF has not demanded the government to slash its defence budget, the minister said, speaking during the Geo News programme ‘Capital Talk‘ on Monday.
“Instead, they [the IMF] have asked the Energy Division to reduce its losses,” said the minister. He added that the global lender has also called upon the government to cut down line losses in the country’s northern, southern and western areas.
The Fund has made it clear to Pakistan that the country would have to set its house in order, he said, adding that the country will have to enhance its tax revenues and reduce losses.
Dastgir said the international powers are not willing to show Pakistan leniency since the US withdrew from Afghanistan.
As the government continues talks with the IMF, former finance minister Miftah Ismail has predicted that things on the economic front would “remain tight” even if the government manages to secure the IMF bailout programme.
“Things will be tight for a while but we can get enough loans for now that we will get some room,” Miftah replied to a question asked by Geo.tv during a question and answer session held by the former financial czar on the popular microblogging site, Twitter, on Sunday.
Replying to a question regarding the economic damage caused due to the delay in the resumption of the bailout programme, Miftah, who was the PML-N’s finance minister before Ishaq Dar, said that Pakistan lost credibility in the eyes of international players, which is “very costly”.