Pak to continue talks with IMF on bailout over weekend

The talks between cash-strapped Pakistan and the IMF will continue over the weekend after the parleys between the two sides reached a deadlock due to Prime Minister Imran Khan's reservations over heavy taxation the people would have to bear, according to a media report on Saturday.

Head of IMF Mission to Pakistan Ernesto Rigo is currently in Islamabad as the country hopes to strike a deal with the global lender for a three-year bailout package totalling around USD 6.5 billion.

We have made good progress in our discussions with the visiting IMF Mission. Consultations will continue over the weekend, Khaqan Hasan Najeeb, the spokesman of the Finance Ministry, was quoted as saying by the Express Tribune.

Sources in the ministry of finance said that there were at least three main sticking points that led to inconclusive talks till the last day of the IMF visit. As of Thursday, the top management of the Ministry of Finance was hopeful to conclude the deal and the IMF team had planned to return on May 11, the report said.

But things went off the track after the IMF insisted on inclusion of some new conditions in the programme, which appeared unreasonable.

Prime Minister Imran Khan also expressed reservations over massive additional taxes burden that the nation will bear from July this year, provided both sides reach an agreement, it said.

Pakistan has accepted the IMF's demands of flexible exchange rate regime, withdrawal of subsidies, containing borrowing from the central bank and reinitiating the privatisation programme.

The talks remained inconclusive despite Pakistan conceded to almost everything that the IMF asked for, the report said.

Pakistan and the IMF are engaged to finalise the bailout package for the past eight months. It was the second visit by the IMF staff level team during the past five months that again could not conclude the deal within the due time.

The sources said the IMF has sent a draft of the proposed agreement to Washington for vetting that includes some new conditions which were not part of negotiations in the first round of talks.