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Debt service could reach a staggering Rs 5.2 trillion.

Debt service could reach a staggering Rs 5.2 trillion.

The International Monetary Fund (IMF) requested Pakistan on Thursday to produce more revenue by raising the general sales tax rate to at least 18%, as the cost of the nation’s debt servicing was anticipated to rise significantly in the current fiscal year.

The day after the government released its updated macroeconomic estimates, which showed an acceleration of inflation to 29% and a stalling of economic growth to 1.5%, the global lender demanded a hike in the basic GST rate. Increased unemployment and poverty in the nation would result from higher inflation and slower economic growth.

The administration disclosed the specifics of the predicted inflows and the $30 billion in external funding obligations one day earlier. However, sources said that the IMF did not seem confident in the nation’s ability to obtain nearly $8 billion from foreign commercial banks and capital markets during these difficult circumstances.

According to the sources, on the second and third days of the negotiations, the administration exchanged information regarding the debt profile of the nation, foreign investment, and macroeconomic projections.