ISLAMABAD – It appears that there won’t be any relief for the public from the high electricity and gas tariffs as interim Finance Minister Dr Shamshad Akhtar has indicated a plan by the caretaker government to raise these utility prices in January.
In a press conference at the Q Block, the federal minister highlighted the government’s commitment under the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA) to lower costs in the energy sector and restore its efficiency.
Dr Akhtar stressed the urgency to address the circular debt in the power and gas sectors, which has surpassed 4% of the Gross Domestic Product.
Discussing her discussions with the IMF, Dr Akhtar mentioned tariff revisions in the energy sector and potential additional taxes on sectors like real estate and retail. However, she clarified that final decisions on these matters are pending.
Emphasizing Pakistan’s need for a fresh short-term IMF program due to fragile macroeconomic stability, she hinted at the necessity for a medium-term program under Extended Fund Facility (EFF) post the SBA conclusion.
Regarding the external financing gap, Finance Secretary Imdad Bosal expressed optimism about a successful IMF review unlocking program and project loans from multilateral lenders such as the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank, and Islamic Development Bank. He anticipated a reduction in the current account deficit, thus decreasing the external financing requirement.
Dr Akhtar anticipated disbursements from the World Bank totalling $2 billion in loans for the current fiscal year. Furthermore, she highlighted the expected buildup of foreign exchange reserves post the approval of a $700 million tranche from the IMF, estimating a total disbursement of $1.9 billion out of $3 billion under the SBA.
Addressing the caretaker government’s efforts to stabilize the economy, Dr Akhtar discussed proactive measures aimed at enhancing market confidence. Initiatives such as the $3 billion SBA program and endeavors like the Special Investment Facilitation Council to expedite investments in critical infrastructure were highlighted.
Pakistani currency remains largely stable against US dollar and other currencies in the open market on February 24, 2024.
In the open market, the US dollar was being quoted at 279.5 for buying and 282.55 for selling.
On Saturday, Euro stands at 302 for buying and 305 for selling while British Pound rate stands at 352.5 for buying, and 356 for selling.
UAE Dirham AED hovers at 76.1 whereas the Saudi Riyal saw slight increase, with new rates at 74.35.
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