- Govt shares new Circular Debt Management Plan with IMF.
- FPA and quarterly tariff adjustment to be revised upward.
- IMF asks govt to chalk out effective strategy to tackle this issue.
ISLAMABAD: Pakistan and the International Monetary Fund (IMF) discussed the energy sector losses in the context of a cut in the circular debt during the current fiscal year in a virtual meeting on Wednesday, The News reported.
With the goal of eliminating the accumulation of circular debt, the government showed its commitment to adjusting the fuel prices and the quarterly tariff.
The government also shared a new Circular Debt Management Plan (CDMP) with the lender for which the baseline tariff was previously increased.
Now the fuel price adjustment (FPA) and quarterly tariff adjustment would be revised upward in order to reduce accumulation of the circular debt. The IMF team raised the issue of the sustainability of the CDMP as the pace of recoveries declined.
The government was asked to chalk out an effective strategy to tackle this issue. This meeting was held virtually at the technical level and it was expected that the newly inducted Minister for Finance Dr Shamshad Akhtar might hold a meeting with the IMF team virtually in the coming weeks.
The IMF mission is expected to hold the first review in October or November on the basis of official macroeconomic figures for the first quarter (July-Sept) period of the current fiscal year.
Pakistan and the IMF struck $3 billion bailout package under Standby Arrangement (SBA) in July 2023, out of which Islamabad so far secured $1.2 billion as upfront installment.
Now, two reviews would be done to release the remaining $1.8 billion till the end of March/April 2024.
