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Imran Khan is pushing for a reduction in the revival of the $ 6bn IMF package

The Imran Khan government is ready to provide the Pakistani parliament with a number of illegal means to try to restart the $ 6bn IMF loan program, putting it at risk of political crisis during the financial crisis.

The finance bill is expected to be tabled in the lower house on Wednesday which would reduce development costs, eliminate foreign aid costs including electricity and gas and eliminate the excise duty on metals and chemicals.

The plans were designed to raise Rs600bn ($ 3.4bn) in the financial year ending June 2022.

Pushing forward and tightening the belt follows an agreement between IMF and Pakistani officials last month to resume payment of the funding package agreed in 2019. These measures are essential to secure the next $ 1bn post-loan loan program. stopped this year.

Pakistan’s economy is in the throes of an economic crisis, with rising inflation highest in years and the rupee is down 17 percent against the US dollar since May. The weekly index of daily necessities such as food and fuel rose about 20 percent last week compared to the same period last year.

The State Bank of Pakistan has responded with raising interest rates twice since last month with a total of 250 bases, up 9.75 percent.

The bill is expected to pass through parliament but the unpopularity of measures to reduce stress has exacerbated the political problems facing Khan. Opponents say a reduction in trade taxes could hurt the poorest of the poor, who face the challenge of rising commodity prices, as opposition parties plan to hold anti-government protests next year.

Khan hopes to be one of the few elected leaders in Pakistan to finish his time, which is due to end in 2023.

The Prime Minister has stepped in promising to end protests that have forced Pakistan to withdraw 12 IMF funds since the 1980’s. incompatible with the bag.

Pakistan’s growth has remained strong, with Fitch Ratings expecting to hit about 4 percent this year. But experts say that this could make life very difficult. “The IMF says you have to do something to reduce the economy,” said Sakib Sherani, chief executive of Macro Economic Insights, a research company in Islamabad.

Shaukat Tarin, Pakistan’s finance minister, has accused the existing sanctions and subsidies of undermining the economy. “The IMF does not say you will not give relief to the people,” he told reporters. “But he says don’t mess with taxes.”

But Shahid Khaqan Abbasi, a former prime minister and opposition leader, said the change was taking place rapidly through parliament. Since Khan became Prime Minister in 2018, he added, prices for basic necessities have risen by 50 percent.

“The reality is that the government has not met the IMF’s demands and wants to address the differences. Ordinary citizens will be severely beaten, ”he said. “There are serious risks such as [the tariff for] gas and electricity. ”

The Khan government has passed another law granting more freedom to the State Bank of Pakistan, which the IMF also demanded. The law will protect the governor of the central bank from being evicted by the government and prohibit government lending.

But critics of the bill say this will prevent the central bank from responding, with one business leader saying their governor could be “Pakistan’s finance minister”.


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