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UPDATE 1-Pakistan: bill for mid-year fiscal adjustment to be presented on Wednesday

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds details and context) ISLAMABAD, Feb 14 (Reuters) - Pakistan's government will present a finance bill for a mid-year fiscal adjustment in parliament on Wednesday, the finance ministry said in a statement. The announcement comes as the economic crisis-struck country is locked in negotiations with the International Monetary Fund (IMF) for the release of critical bailout funds. With roughly enough reserves to meet three weeks of imports, the country is undergoing measures to increase its revenues despite multi-decade high inflation of 27%. Earlier on Tuesday, local media outlet ARY News claimed Pakistan has sent a draft of the Memorandum of Economic and Financial Policies (MEFP) to the IMF.


On Feb,. 10 Finance Minister Ishaq Dar told a news conference that taxes worth 170 rupees billion will have to be imposed.


That day, the country's Economic Coordination Committee approved a plan to slash its circular debt, a form of public debt that builds up in the power sector due to subsidies and unpaid bills.


The committee also approved an additional surcharge of Rs 1 per unit of electricity for FY 2023-24 to recover an estimated 76 billion Pakistani rupees ($282.81 million) in power sector liabilities. In a bid to unlock the funds the country has also removed artificial caps on the rupee resulting in it shedding more than a quarter of its value, fuel prices rose by almost a fifth, and the key policy rate has been hiked.


Talks centre around reaching an agreement on a reforms agenda under the country's $6.5 billion bailout programme, which it entered in 2019. An agreement on the ninth review of the programme would release over $1.1 billion. (Reporting by Gibran Peshimam in Islamabad and Ariba Shahid in Karachi; Editing by Alison Williams and Sandra Maler)

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