WASHINGTON : As initial talks between Pakistan and International Monetary Fund (IMF) have concluded at a positive note and both stakeholders have agreed to move to next phase of technical level talks from .next week , the latter is likely to give a bail out package of $ 8 billion to former .IMF is likely to release additional $ 2 billion to Pakistan to help it seize downfall of its economy . The fund is likely to release $ 6 billion to Pakistan in due course of Pakistan . The fund can also reschedule its due payment from Pakistan for around 10 months to one year.
According to information pouring in from Washington , Pakistan’s economic team currently in US to negotiate with IMF has given some guarantees to the fund for securing the bail out package . The most important of these guarantees is immediate withdrawal of subsidy given by the ousted government on fuel and power . The last government had frozen the rates of fuel and power some one and half months ago to give relief to inflation hit people. This decision has already cost Rs 100 billion to the national exchequer and if subsidy given on these two key fund generators ,fuel and power , is not withdrawn forthwith , Its total impact on budget would be around Rs 400 billion which counts half of the public sector development programme (PSDP) 2021-22.
Pakistan was in dire need to get financial support from IMF to control its widening trade deficit, besides making funds available for its development projects. Pakistan also badly needs to pump funds into PSDP to speed up its economic development .
Aware of the gravity of financial situation of Pakistan , the new government has rushed for immediate corrections on economic fronts. It , as committed to IMF , will withdraw subsidy on fuel and power . It can also reduce, if not completely withdrawn, subsidy given to industrial sector and some specific companies . The ousted government took every decision that could dent Pakistan’s economy. It among many bad economic decisions provided subsidy to some handpicked companies one of such beneficial multinational company was Procter and Gamble.