We've made good progress in our discussions with IMF - Pak Finance Ministry

After Pakistan Prime Minister Imran Khan rejected the first draft for a bailout package, the country's Foreign Ministry on Saturday said that the talks with International Monetary Fund (IMF) are still underway. The talks, which were to be wrapped by May 10, will continue as "more time is required" to reach a consensus, reported Geo TV.

"We have made good progress in our discussions with the visiting IMF mission. Consultations will continue over the weekend," said Finance Ministry spokesperson. The Prime Minister on Friday rejected the terms and conditions posed by the IMF for the bailout of USD 6-7 billion. While rejecting many conditions, he agreed to hike power tariffs and taxes and withdraw tax concessions and exemptions. The government is planning to increase the costs of electricity and gas for consumers in the two phases this year. The IMF has asked Pakistan's government to not control the rate of the dollar, and subsidies in the energy and other sectors would be withdrawn.

The IMF is pushing Pakistan to embrace a more flexible rupee policy to end repeated boom-and-bust cycles, with many analysts arguing that the local currency is overvalued, Geo News reported. In March, the Central Bank of Pakistan cut its economic growth estimates, forecasting the economy would expand 3.5 to 4 per cent in the 12 months to the end of June, well short of a government target of 6.2 per cent. While the IMF showed a gloomier picture predicting the growth of 2.9 per cent in 2019 and 2.8 per cent next year

The IMF is pushing Pakistan to embrace a more flexible rupee policy to end repeated boom-and-bust cycles, with many analysts arguing that the local currency is overvalued, Geo News reported. Pakistan is seeking USD eight billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. If the deal is concluded, this would be the 14th IMF aid package for Pakistan.

(With inputs from agencies.)