Pakistan close to securing IMF deal: Khurram Dastgir

Power minister says IMF has not asked Pakistan to cut down defence budget

Business Desk
Power Minister Khurram Dastgir. Twitter/File
Power Minister Khurram Dastgir. Twitter/File

  • Pakistan is seeking a crucial instalment from IMF to avoid default.
  • Minister says global powers not willing to show leniency to Pakistan.
  • Says fund has asked Pakistan to curtail its line losses in power sector.

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.

Things to remain tight for a while: Miftah

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 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”.

The IMF team has been in Islamabad for the last few days for talks with the Pakistani authorities. Following the technical-level negotiations between Pakistan and the IMF's negotiation team led by Nathan Porter, the two sides will start the policy-level negotiations today. The lender has imposed strict conditions on Pakistan in various fields.