Islamabad: Caretaker Finance Minister Dr. Shamshad Akhtar has revealed that the government is set to increase gas prices once again in January 2024 as part of an effort to address the persistent issue of circular debt. In a media briefing held in Islamabad, Dr. Akhtar stated that the move is aimed at achieving a tax target of Rs9415 billion set by the Federal Board of Revenue (FBR).
“Our first priority is to meet the tax revenue target, and in case of any shortfall, additional measures will be imposed,” she asserted.
Dr. Akhtar informed the media that the International Monetary Fund (IMF) has been notified about the tariff revisions in the energy sector, including the possibility of imposing additional taxes on various sectors such as real estate. The decision on taxes on retailers is yet to be finalized.
She also announced the postponement of a $1.5 billion international bond issuance, stating that the government plans to proceed when the country’s rating improves after an agreement with the IMF.
“We are anticipating $2 billion in loans from the World Bank in the current fiscal year, with additional expected loans from the Asian Development Bank, Islamic Development Bank, and Asian Infrastructure Bank totaling $1 billion,” added Dr. Akhtar.
Highlighting the importance of remaining in the IMF program, she stated, “At this stage, completing the $3 billion program is a priority, and discussions for a new program will be considered if time allows.”
Dr. Akhtar emphasized the significance of staying with the IMF to boost exports and create new resources. The government is also exploring commercial financing options from various countries and international organizations.
An agreement has been reached with the IMF, awaiting approval from its Executive Board in the coming days. Dr. Akhtar explained that after the approval of the staff-level agreement (SLA), Pakistan is set to receive about $700 million, bringing the total payments under the IMF program to $1.9 billion.
“We’ve seen improvements in the business climate and investor confidence since entering the SLA in July 2023,” said Dr. Akhtar, attributing these positive changes to the reforms undertaken.
While acknowledging external threats such as regional tensions and rising commodity prices, Dr. Akhtar stressed the government’s commitment to stabilizing the microeconomy, achieving growth, and reducing external debt through financial stability.
Clarifying a previous statement, she clarified, “I mentioned $7 billion Reko Diq assets, not a new loan from the IMF.”
