Pakistan, IMF talks to continue on second day today.

ISLAMABAD -- The talks between Pakistan and the International Monetary Fund (IMF) will resume on Saturday for the second day in the capital.

Both sides held talks on Friday after which the finance ministry said that both sides have made 'good progress' in their discussion. 'The consultations will continue over the weekend,' the ministry added.

Earlier on Friday, it was reported that the Pakistan Tehreek-e-Insaf (PTI) government and IMF are likely to announce a staff-level agreement today (Friday), as the former has accepted most of the global lender's demands - earlier termed harsh - that will lead to the unfolding of an inflationary budget expected to be announced on June 11 - loaded with taxes.

Both sides held the last round of talks a day earlier in which the remaining issues of the fiscal deficit and primary balance were finalised, sources in the Ministry of Finance said. They added that the country did not have any other option but to concede to the IMF's demands to remain afloat.

Islamabad has also prepared the formal application for the loan programme which would be shared with the visiting IMF mission on Friday. State SBP Governor Raza Baqir will share the draft of the application with IMF representatives.

According to reports, a staff-level agreement is expected to be announced on Friday for a bailout program of $7-8 billion. It is worth mentioning here that the country already owes $5.8bn to the IMF on account of previous loans.

During their discussions on Wednesday, the two sides worked out a financing gap of around $11 billion for the next fiscal year, 2019-20.

Under the understanding, the government will start withdrawing exemptions offered in various taxes amounting to around Rs350bn in the budget for 2019-20.

The two sides also agreed that Pakistan would increase the costs of electricity and gas for the consumers in the next budget. However, reforms in the tax and energy sectors have been outlined in the list of top priorities. According to sources, the government will have to reduce subsidies and take Rs340bn from consumers in the energy sector only.

It has been agreed that the power sector regulator, the National Electric Power Regulatory Authority (NEPRA), would be made autonomous and the government interference to take popular decisions would be minimised.

Moreover, the State Bank of Pakistan (SBP) would be able to regulate exchange rates independently, and the rate of the US dollar would be set without any pressure from...