Government guarantees IMF on electricity prices surge

ISLAMABAD: During the ongoing discussions between the government and the International Monetary Fund (IMF) regarding the second economic review, assurances have been made regarding the imminent rise in electricity tariffs.

Scheduled over the course of three days, talks between the two entities have centred on key economic matters. Specifically, the government has pledged to the IMF a prompt increase in electricity tariffs, indicating a potential surge in prices effective from July 1. This adjustment is expected to occur on a monthly, quarterly, and annual basis.

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Private television reports have revealed additional commitments made by the government, including plans to gradually formalise the economy to bolster tax revenue.

Anticipated to materialise by the beginning of the following week, a staff level agreement between the government and the IMF appears imminent. Of paramount importance to the IMF is ensuring the protection of beneficiaries under the Benazir Income Support Programme (BISP). In response, the government has committed to expanding the number of BISP beneficiaries by June, albeit through a paid framework.

The IMF has underscored the necessity of maintaining a stringent monetary policy and adhering to a market-based exchange rate policy. Furthermore, the IMF delegation has reiterated the importance of ongoing reforms to sustain economic stability.

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Upon the successful conclusion of negotiations, Pakistan is poised to receive the final tranche of financial assistance, pending approval from the IMF’s Executive Board.