Islamabad:
The International Monetary Fund (IMF) will start virtual discussions on the next Pakistan budget on Wednesday (today) because the visit to its mission in Islamabad has been delayed due to security problems in the region, government sources of The Express PK Press Club said on Tuesday.
Virtual talks will take place because the world lender has appointed a new mission leader in Pakistan. According to sources, the IMF mission delayed its expected arrival in Islamabad on Tuesday due to the uncertainty caused by Indian aggression, which affected trips by plane through the region.
However, the sources have added that the mission should now go to Islamabad this weekend, subject to the security situation. They stressed that the adjustment would not negatively affect the work or the calendar of the original program.
The talks should start on May 14 (today) and continue until May 16. “Virtual discussions should take place. For the second and last stage of the talks, the IMF team is expected to arrive in Islamabad on Saturday and stay until May 23,” said the source.
The resident representative of the IMF in Pakistan Mahir Binici did not respond to a request for comments on the change in the travel plan. The spokesman for the Ministry of Finance, Qumar Abbasi, also did not answer questions about the change in travel plans.
Meanwhile, the IMF has appointed Iva Petrova, member of the Bulgarian origin staff, as a new chief mission in Pakistan. She would join the discussions with the outgoing chief of mission Nathan Porter – who served in the post for an extended mandate.
Porter was known for his firm position on political issues, but was opposed to public interactions. He also kept strong control over the media policy of the Ministry of Finance. Mahir did not comment if the outgoing and new mission leaders would join the two cycles of talks.
Petrova, who holds a doctorate in economics from Michigan State University, was head of the IMF mission in Armenia. Previously, she had served with missions in Israel, Iceland and Latvia.
The Government of Pakistan plans to unveil the budget for the year 2025-26 on June 2 – before the Eidul Azha holidays. It will be the second speech of the budget of the Minister of Finance Muhammad Aurangzeb, which must comply with the parameters that the IMF will define during these discussions.
Budget policy should also remain tight in the next exercise. The IMF has asked Pakistan to make a budget on the hypothesis of 1.6% of the primary budgetary excess of GDP, which will require a generation of approximately 2 rumors of rupees beyond interest without interest.
It is proposed that the fiscal objective of the Federal Board of Return (FBR) is 11% of GDP or RS14.3 Billion. The IMF would examine whether the government plans to take credible realistic measures to support the new tax objective, the sources said.
The size of the federal budget is still provisional due to the overhaul of defense needs and the government plans to announce fewer RS18 Billion Budget. The overall objective of budgetary deficit after incorporating significant provincial cash surpluses is planned at 5.1% of GDP or 6.7 billions of rupees, they said.
According to sources, the first day of talks, the Ministry of Finance informs the mission of the IMF of budgetary developments during the period of July-Mars for the current financial year. He will also share the details of the additional grants approved during the financial year.
The IMF has set several budgetary conditions, whose successful completion has so far contributed to smoothing the continuation of the program despite initial withdrawals. Pakistan has achieved the objectives of the IMF for a primary budget surplus by the federal government, as well as objectives for recovery of net income and excess cash by the four provinces.
Against a primary excess target of 2.7 billions of rupees, the federal government reported a surplus of Rs 3.5 Billions, or 2.8% of GDP. This higher surplus was mainly due to the entirely reservation of the central bank’s annual profit in the first quarter, the entire estimated profit of Rs 2.5 Billions already recorded.
The four provinces collectively generated an excess in cash of RS1,028 Billions in the first nine months, exceeding the objective of the IMF of 25 billion rupees. The federative units also generated 685 billion rush of tax revenue, exceeding the objective of the IMF of 79 billion rupees. But against a income target of nine months of more than 9.2 rumors of rupees, the FBR brought together 8.5 billions of rupees, down the target of 715 billion rupees.
The IMF also asked the government to update any economy of the government’s expected reduction. The goal without tax in the next year will also be discussed during the first day of talks, mainly the prospects of the collection of oil directors and the profits of the Central Bank.
The FBR will give an update on tax performance in April and the chances for the rest of this exercise. The tax deficit has reached an amount of RS830 billion rupees in the first 10 months of the financial year, although the government has made additional record taxes and reducing reimbursements.
It was not until April, the government added around 135 billion rupees to the tax deficit, which violated the commitment to the IMF that the deficit against the original annual objective will not exceed 640 billion rupees.
The FBR provisionally collected 9.3 billions of tax rupees by the end of April. However, the collection was around 27% or 1.95 billion of rupees higher than the previous exercise, but it is not enough to stay on the right track.
The sources have indicated that on the first day, discussions will also take place in the so -called application measurements in the fields of the track and the trace, the program of retailers and the management of the risk of conformity. The FBR has miserably failed in all these areas and its collection is largely motivated by additional tax measures.
