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Warning of Inflation Surge with New IMF Bailout

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Adviser to the Khyber Pakhtun­khwa chief minister on finance, Muzzammil Aslam, recently sounded an alarm regarding the potential consequences of the new IMF bailout package, emphasizing the harsh conditions that could lead to a surge in inflation and worsen public hardships. Aslam urged the government to approach the negotiations cautiously and involve all federating units to secure a more favorable financial deal.

During a press conference with PTI Central Information Secretary Raoof Hasan and PTI Senator Walid Iqbal, Aslam highlighted that while a staff-level agreement had been reached between the IMF staff and Pakistani authorities on the final review under Pakistan’s Stand-By Arrangement, the IMF’s executive board meeting was pending. He expressed concern over the delay in the board meeting, which might be postponed until Pakistan’s economic indicators are released.

Aslam clarified that PTI’s communication with the IMF was not intended to obstruct the financial package but rather to address the concerns regarding the proposed bailout terms. He questioned the feasibility of the new IMF bailout program, particularly due to the suggested imposition of substantial taxes that could trigger a wave of inflation.

The IMF’s proposed measures include a significant increase in the petrol levy by Rs60, along with substantial hikes in gas and power prices to meet the fiscal tightening conditions set by the IMF for unlocking the new program. Aslam cautioned that these actions could have severe repercussions on the economy and the general public, exacerbating the already challenging economic situation. In light of these developments, Aslam emphasized the importance of a balanced approach in negotiating with the IMF to safeguard the interests of the people and the economy.

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