The government has initiated negotiations with the International Monetary Fund on Wednesday regarding the release of critical funds, a process decelerated by apprehensions about the speed of economic reforms in the country.
Pakistan has frequently pursued international support to stabilize its economy, which has been affected by crippling national debt, bolting inflation and a tumbling rupee.
The talks are taking place in the Qatari capital Doha, the Ministry of Finance said, and are anticipated to continue into next week.
Finance Minister Miftah Ismail, Minister of State Dr. Aisha Ghous Pasha, Finance Secretary Hamed Yaqoob Shaikh, State Bank of Pakistan Acting Governor Dr. Murtaza Syed, Federal Board of Revenue Chairman Asim Ahmad and other officials belonging to the Finance Division are taking part in the talks.
A major deadlock is expected to be over exorbitant fuel and electricity subsidies. The finance minister said that he wanted to “find a middle ground” to the problem.
Economist Shahrukh Wani said that the government would attempt to convince the IMF to let it keep some of the subsidies for political stability but the IMF would refuse in order to make the trade and budget deficit manageable.
A $6 billion IMF bailout package agreed upon by former prime minister Imran Khan in 2019 has never been fully implemented. The previous government went back on the agreements to cut down or remove some subsidies and to improve revenue and tax collection.
Pakistan has so far received $3bn, with the program set to end later this year.
Officials are looking for an extension to the program till June 2023, as well as to release the next tranche of $1bn.