IMF asked Pakistan to show how it would fund $1.5bn subsidy program – minister By Reuters

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© Reuters. FILE PHOTO: Pakistani Prime Minister Imran Khan speaks during an interview with Reuters in Islamabad, Pakistan June 4, 2021. REUTERS/Saiyna Bashir/File Photo

By Asif Shahzad

ISLAMABAD (Reuters) – The International Monetary Fund (IMF) has asked Pakistan to explain how it will finance a $1.5 billion grant program announced by Prime Minister Imran Khan, Finance Minister Shaukat Tarin said on Sunday. .

” There are no problems. We have given them details of where the funds are coming from,” Tarin said, adding that the IMF wanted details of the resources to finance the fuel and electricity subsidy, which Pakistan has frozen for the next four months until to the new budget.

The IMF began the seventh review of the $6 billion bailout package agreed with Pakistan in 2019, and Tarin said he would have a final meeting with the lender on Tuesday.

The IMF has asked that it needs to see the SOEs’ dividend deals as well as details of the reserve funds the central government will get from the provinces.

“We did our homework,” Tarin said.

Some of the grant money would also come from above-target revenue Pakistan was receiving in this financial year, he had previously said.

Earlier this month, Tarin said revenue would reach 6.1 trillion Pakistani rupees ($34.2 billion), against a target of 5.8 trillion rupees.

Embattled Khan, faced with a no-confidence decision to oust him from office by opposition parties, had announced lower petrol and electricity prices despite a sharp rise in the global price

oil market.

The South Asian country had to take fiscal tightening measures to pass its latest IMF review, which was delayed for months as the government struggled to complete the prior steps required by the lender to unblock $1 billion in February.

(Additional reporting by Syed Raza Hasan; Editing by Muralikumar Anantharaman and Shri Navaratnam)

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