The International Monetary Fund (IMF) has asked Pakistan to explain how it will fund the $ 1.5 billion subsidy package announced by Prime Minister Imran Khan, Finance Minister Shaukat Tarin said on Sunday.
“No issue. We have given them details of where the funds will come from,” Tarin said, adding the IMF wanted details of sources to fund fuel and electricity subsidies, which Pakistan has frozen for the next four months until the new budget.
The IMF has begun a seventh review of the $ 6 billion bailout package agreed with Pakistan in 2019, and Tarin said he would hold a final meeting with lenders on Tuesday.
The IMF asked it to look at the State -Owned Company (SOE) dividend agreement as well as the details of the replacement funds that the central government would get from the provinces.
“We’ve done our homework,” Tarin said.
Part of the subsidy money will also come from in excess of the target that Pakistan earned this fiscal year, he said earlier.
Earlier this month, Tarin said revenue would hit 6.1 trillion Pakistani rupees ($ 34.2 billion), against a target of 5.8 trillion rupees.
Embattled Khan, facing disbelief to oust him from office by opposition parties, has announced cuts in petrol and electricity prices despite a sharp rise in the global oil market.
The south Asian country had to take fiscal tightening measures to approve its final IMF review, which was delayed for months as the government struggled to complete the initial action needed by lenders to release $ 1 billion in February.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)