Pakistan-IMF talks continue for MEFP agreement

Pakistan and the International Monetary Fund (IMF) have formally started talks to reach an agreement on the Memorandum of Financial and Economic Policies (MEFP), reported 24NewsHD TV channel on Tuesday.

The discussions could pave the way for a Staff-Level Agreement (SLA) between the two sides.

The IMF review mission and Pakistani authorities have begun negotiations on the outstanding points in the MEFP. 

Sources said that the International Monetary Fund (IMF) is demanding the deregulation of the sugar sector with the permission of all provinces.

IMF officials will also hold talks with Pakistani officials today. IMF also asked Pakistan to withdraw tax exemption on EVs under the new auto policy.

On the other hand, IMF agreed on Prime Minister’s fuel subsidy scheme for the consumers but demanded not to increase the subsidy.

The IMF further demanded to limit the subsidy scheme for motorcyclists and three wheelers and 800CC vehicles.

IMF delegation will also hold discussions with the officials of the Petroleum Ministry. The Petroleum ministry delegation will be headed by Federal Minister for Petroleum Ali Pervaiz Malik.

The IMF delegation will also discuss the structure of the gas tariff and its circular debt. IMF delegation will meet officials of the Ministry of Privatization today.

Both sides are working to resolve the remaining issues and reach a consensus during the ongoing discussions.

Officials said an agreement could lead to the Staff-Level Agreement by the end of the current talks. However, unresolved matters could be addressed through virtual discussions after the mission’s current engagement ends.

The MEFP is an important step in the IMF review process and outlines the economic and financial policies agreed between Pakistan and the Fund. Progress on the document is therefore expected to determine the next stage of negotiations.

If the two sides settle the remaining issues, the SLA could be finalised in the coming days. Otherwise, officials are expected to continue discussions remotely to resolve outstanding matters before the agreement is signed.