**IMF Conditionally ‘Agrees’ to Pakistan’s Circular Debt Management Plan**
ISLAMABAD: The International Monetary Fund (IMF) has conditionally agreed to Pakistan’s circular debt management plan, sources revealed.
The IMF’s approval is contingent upon Pakistan implementing a debt servicing surcharge (DSS) of Rs 2.8 per unit on consumers. This surcharge is intended to help reduce the country’s circular debt, which the government aims to decrease by Rs 1,250 billion.
The government’s plan involves borrowing Rs 1,250 billion from banks at a 10.8% interest rate. This loan would then be repaid through the surcharge imposed on consumers.
In a related development, the IMF has also urged Pakistan’s Special Investment Facilitation Council (SIFC) to avoid granting tax exemptions to international investment projects. This includes the $2 billion Chaghi-Gwadar railway track project. The IMF argues that such exemptions would negatively impact the country’s revenue generation.
The government had sought investment from Gulf countries for the Chaghi-Gwadar railway project, but the IMF has opposed providing tax exemptions for these types of international investments facilitated by the SIFC. The SIFC aims to facilitate investment and improve the transportation of minerals from Reko Diq to Gwadar via a new railway line.
Officials briefed the IMF delegation, explaining that the SIFC platform is designed to facilitate investment and that a new railway line will be built for mineral transport from Reko Diq to Gwadar.