Pakistan, IMF fail to reach agreement

Even though Pakistab has fulfilled IMF's tough conditions, Pakistan has so far failed to strike a staff-level agreement with the International Monetary Fund (IMF) under the $6 billion Extended Fund Facility (EFF). According to the NEWS report, both sides have failed to reconcile on the Memorandum of Economic and Financial Policies (MEFP).

The Pakistani side expects the finance secretary to prolong his stay in Washington DC for the next few days to make last-ditch efforts in reconciling and evolving consensus on the MEFP and completion of the sixth and seventh reviews, to pave way for the approval of $1 billion under the EFF programme.

Sources said that it was a worrisome development that the IMF staff was so far busy in number crunching mainly on the fiscal framework, external front and power sector.

Despite Pakistan's hectic efforts and fulfilling the toughest conditions of the IMF on account of raising the electricity tariff by Rs1.39 per unit on average for baseline tariff, raising POL prices by Rs10.49 for petrol and Rs12.44 for diesel, the IMF staff is still unsatisfied with the macroeconomic framework under the MEFP and without agreement over it, the staff-level agreement will not be struck and the IMF tranche will be jeopardised.

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