• Pakistan, lender reach staff-level agreement on Extended Fund Facility review, another $1.3bn secured for climate resilience
• About Rs7 cut in electricity tariff likely; water pricing to be introduced; gradual end to automobile protectionism on the cards
• IMF appreciates Pakistan’s economic strategy; PM says deal secured without imposing more taxes

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have agreed to introduce a new carbon levy, reduce electricity tariffs, increase water pricing, and open up the automobile sector to global trade under the Staff-Level Agreement (SLA), announced on Wednesday.

“The IMF team has reached a SLA with the Pakistani autho­rities on the first review of the 37-month Extended Arran­gement under the Extended Fund Facility (EFF), and on a new 28-month arrangement under the IMF’s Resilience and Sustainability Facility (RSF) with total access over the 28 months of around $1.3 billion,” the Fund said in a statement.

This takes the combined volume of IMF support for Pakistan to about $8.3bn.

The agreement is subject to the approval of the IMF’s Executive Board. Upon approval, Pakistan will have access to about $1bn under the EFF, bringing total disbursements under the programme to about $2bn.

Senior officials privy to the SLA entailing the Memo­randum of Economic & Financial Policies (MEFP) said that about Rs7 per unit reduction in average electricity rates would be announced by the prime minister in a few days, but with effect from April 1, 2025.

Other major steps — carbon levy, water pricing and automobile protectionism — would be gradual, with implementation starting from July 1, 2025. The overall fiscal consolidation will continue in the upcoming budget through a reduction in energy subsidies and tight development........

© Dawn Business