The International Monetary Fund (IMF) has asked Pakistan to revise the budgetary framework for 2023-24 before its passage from Parliament in order to strike a staff-level agreement.
Without changes in the budget, the staff-level agreement with the IMF cannot be achieved, an official from the international agency told Pakistan in a virtual meeting on Friday night.
Pakistan and the IMF are making efforts to evolve a broader agreement on the budgetary framework which, if struck, could pave the way for approval of the budget for 2023-24 with revisions, including jacking up the FBR’s tax collection target, removing subsidies plus new amnesty scheme of one lakh dollars and slashing expenditures of defense and military. Besides these, IMF also asked to manage and fill external financing gap.
The Pakistani side shared the revised budgetary estimates for next fiscal year with the IMF but so far, a broader agreement is yet to be achieved, a top official said.
The source also claimed that the wind-up speech of finance minister Ishaq Dar was delayed — earlier it was expected to be held on Friday and now it might be done on Saturday or Monday.
In last-ditch efforts, Pakistan Prime Minister Shehbaz Sharif called and met the IMF MD in Paris and Dar recently engaged with the US Ambassador and the UK High Commissioner for help and to seek support in striking the IMF deal.
Recently, in an interview with Turkish news agency Anadolu, Sharif said he was hopeful of finalising a deal with the IMF this month.
Pakistan’s rupee has lost nearly 50 per cent over the past 12 months. The main stock index has suffered a double-digit decline over the same period. Foreign exchange reserves at $4.457 billion cover barely a month’s worth of imports.
The nuclear-armed nation faces the risk of a default unless it receives massive support. The gross public debt-to-GDP ratio stands at 73.5%, according to government data as of December.