ISLAMABAD: Pakistan and the International Monetary Fund (IMF) are reported to have reached closer to an agreement on a $5.4 billion loan package.

The country’s economic team, led by Finance Minister Ishaq Dar, held a four-hour-long meeting with the IMF delegation, led by Jeffery Frank, on Monday to sort out details of the programme.

In addition to the $5.4bn IMF package, Pakistan will also get a $5.6bn loan from the Asian Development Bank and the World Bank as well as countries like Japan, the United States and the United Kingdom. The total volume of the loan will be $11bn.

According to a source, the IMF programme will pave the way for getting the additional loan from donor banks and the three lending countries.

“We have reduced the gap between various thorny issues,” the source claimed and said further progress would be achieved in a day or two. “The talks are moving in the right and positive direction,” the source added.

The two sides had reached an understanding on reducing the fiscal deficit target, a source privy to the meeting told Dawn.

The IMF wanted the government to reduce the fiscal deficit to 4.5 per cent over three years. The target has been left for Islamabad to decide if it wants to do it through reduction in expenditures or withdrawal of subsidies and tax exemptions.

Pakistan has also agreed to restart its privatisation programme from Sept 30. A comprehensive plan for the purpose would be ready in the next few months, the source said.

Finance Minister Ishaq Dar told journalists that the talks would continue for another couple of days. “We have had positive talks today,” he said, adding that people should wait for the results. He said he would not accept any new tax condition being attached to the programme.—Mubarak Zeb Khan