Pakistan has reportedly struck a deal with the International Monetary Fund (IMF) on financial packages worth about $6 billion according to PM Khan’s Adviser on Finance Dr Abdul Hafeez Shaikh.
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The staff level agreement on economic policies, which could be supported by a 39-month Extended Fund Arrangement (EFF) aimed to support Pakistan’s strategy for stronger and more inclusive growth by reducing domestic and external imbalances, removing impediments to growth, increasing transparency, and strengthening social spending.
Earlier on Saturday, talks between Pakistan and the IMF reached a deadlock due to change in goalpost by the fund and the prime minister’s reservations over heavy taxation, resulting into extension in parleys.
The Pakistani authorities and the IMF team have reached a staff level agreement on economic policies that could be supported by a 39-month Extended Fund Arrangement (EFF) for about US$6 billion – IMF’s Ramirez Rigo ~/link.aspx?_id=AF87153FFB434479AD96C521FE57F27D via @imfnews
— ADBPakistan (@PakistanADB) May 12, 2019
There were at least three main sticking points that led to inconclusive talks till the last day of the IMF visit, said sources in the Ministry of Finance. As of Thursday, the top management of the Ministry of Finance was hopeful to conclude the deal and the IMF team had planned to return on May 11.
But the sources said things went off the track after the IMF insisted on the inclusion of some new conditions in the programme, which appeared unreasonable. Prime Minister Imran Khan also expressed reservations over massive additional taxes burden that the nation will bear from July this year, provided both sides reach an agreement.