Govt wary of IMF-mandated 'tough decisions' in an election year.

WASHINGTON -- The government's fear of losing popularity before the elections seems to be keeping Pakistan from finalising a deal with the International Monetary Fund (IMF) that could stabilise the economy.

Official and diplomatic sources told Dawn on Monday that both sides were still discussing the seven demands that the IMF wants Pakistan to accept before it resumes economic assistance to the country.

The demands include withdrawing electric subsidies, linking gas prices to the international market, free-floating dollars, and not blocking LCs.

The government 'fears that implementing some of these demands will hike the price of essential items across the board,' a source said.

Official says waiting for caretaker govt before taking action would be 'disastrous'

'It will make the government even more unpopular than it already is, so close to the elections.'

Pakistan's power regulator has already allowed Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company (SSGC) to hike rates up to 75 percent, subject to cabinet approval.

Islamabad is waiting for the 9th review of a loan-arrangement that the previous government signed with the IMF. The review would lead to the release of the next tranche of funds to Pakistan that has been pending since September.

In August 2022, the IMF approved the seventh and eighth reviews of Pakistan's bailout program, agreed in 2019, allowing the release of more than $1.1 billion.

IMF officials have indicated that they are willing...