Pakistan and the International Monetary Fund (IMF) continued policy talks on Tuesday, where the international lender asked Islamabad to bring foreign exchange reserves up to $16.20 billion by June 30.
The country’s finance czar is expected to swallow bitter pills to fix the economy on the direction of the IMF.
The IMF has insisted on the immediate removal of restrictions on imports, for which $4 billion will be needed to open letters of credit (LCs).
Finance Ministry officials said that in order to bridge the trust deficit, a reduction of expenditure of over Rs600 billion is being reviewed.
The officials said electricity and gas prices will skyrocket due to the reduction in subsidies.
They further said all development projects will be made public on the monitoring website phase-wise.
The Pakistan team assured the IMF mission that legislation will be made to make the accountability process transparent.
A new policy for borrowing and returning foreign loans is yet to be decided. There will also be negotiations on the creation of infrastructure for repayment of circular debt, and a new method of taking and repaying loans from banks in rupees will be implemented.
The Federal Board of Revenue (FBR) said Rs3,965 billion in taxes have been collected in seven months from July 2022 to January 2023.
Officials of the federal tax body assured the IMF mission of meeting the tax target of Rs7,470 billion in the current fiscal year.