ISLAMABAD - Pakistan on Tuesday expressed its inability to increase the electricity prices as demanded by the International Monetary Fund (IMF) due to its impact on inflation, which has already touched the highest level.

Pakistani, however, assured the Fund to present its alternate plan against the increasing power tariffs.

The IMF delegation yesterday met with the officials of Ministry of Energy.

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During the meeting, the delegation was briefed on the reforms programme and performance of the ministry.

Prime Minister Imran Khan has already decided not to put further burden on the masses as they are already facing the high inflation rate. Inflation had recorded at 14.6 percent in January 2020 — scaling the highest level in 12 years.

The officials informed the IMF delegation that the government is working to introduce a new tariff adjustment mechanism that would keep the average power rates unchanged for up to 18 months.

The sources further said that the Ministry of Energy and IMF delegation agreed to continue dialogues; however, the delegation didn’t react to the proposal of freezing electricity tariff.

The policy level talks between Pakistan and International Monetary Fund (IMF) continued on Tuesday, which are expected to complete tomorrow.

The IMF would release the third tranche worth of $450 million if the visiting delegation expresses satisfaction over the economic situation of the country. 

Pakistan has so far received $1.44 billion from IMF in two tranches. The IMF in July 2019 had approved a 39-month extended arrangement under the EFF for Pakistan for an amount of about $6 billion.

Pakistan had already rejected the IMF’s proposal for increasing taxes to bridge the tax collection shortfall in seven months of the current fiscal year.

The government believes that increasing taxes and power tariff would hike the inflation, which had already made the lives of people miserable.

The IMF projected Pakistan’s GDP growth at 2.4 percent and inflation around 11 to 12 percent for the current fiscal year. Pakistan had also informed the Fund that the government would keep the budget deficit at 7.5 percent of the GDP during the current fiscal year.

The IMF delegation would meet the members of Senate and National Assembly standing committees on finance and revenue today (Wednesday) in the Parliament House. The meeting would be in-camera.

Members of these committees would share their viewpoint on the ongoing IMF programme.