As negotiations for a possible bailout got underway, the International Monetary Fund (IMF) rejected the Pakistani government’s circular debt management plan and demanded that it increase power prices by Rs 12.50 per unit.
IMF rejects Pakistan’s Circular Debt Management Plan
The increase in electricity prices is anticipated to reduce Pakistan’s cash-strapped power sector’s losses.
At present, IMF mission is currently in Pakistan holding talks after which a staff level agreement is expected to reach between the two sides.
IMF during technical level talks stated that revised CDMP presented by Pakistani counterparts as ‘unrealistic’, which is based on certain “wrong assumptions”.
Shaky Economy forces reluctant Pakistani leadership to go for talks with IMF
Newly developed debt management plan seeks to restrict losses of power distribution companies to 16.27% on average during the current fiscal year.
Pakistan is on the verge of bankruptcy and even its close allies and friends have distanced themselves from it. This has forced the Pakistani leadership to go for a painful bailout despite knowing that there will be a massive backlash to it from each and every stakeholder in the society. Infact Prime Minister Shahbaz Sharrif was against the tax raise and subsidy slashing by IMF.
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