ISLAMABAD: As the deadlock between Pakistan and the International Monetary Fund (IMF) continues over the huge fiscal gap, the two sides will try again on Monday (today) to resume technical-level talks.
Policy-level talks between the two sides, which were scheduled to begin today, will begin on Tuesday (tomorrow), JEE News reported.
According to the Fund’s assessment, Pakistan faced a primary deficit gap of 0.9% of the equivalent gross domestic product (GDP) of Rs 800-850 billion mainly due to lower tax and non-tax revenues and rising expenditure.
However, the Pakistani side has not accepted such a fiscal gap, arguing that it is estimated at 0.5 to 0.6 percent of GDP in the range of Rs 400 to 450 billion for the current fiscal year.
The Washington-based lender estimated that the Federal Board of Revenue of Pakistan (FBR) may face a shortfall of Rs 130 billion in achieving the desired tax collection target of Rs 7,470 billion.
The government and the IMF could agree to end low electricity tariffs for the export sector and link it to export earnings.
The textile sector is selling 40 percent of its production in the domestic market, so subsidizing electricity and gas rates on the entire production is wrong.
Differences between Pakistan and the visiting IMF review mission on determining the exact monetary gap still persist during technical-level discussions. Once it is finalized with the IMF, additional tax measures will be strengthened, which will be unveiled in the upcoming mini-budget. In view of the lack of agreement on the monetary gap figures, the technical level talks will continue on Monday and then the policy level talks are expected to start from Tuesday,” sources told reporters in a background chat. Confirmed by speaking to a select group. on Saturday.
Last week, the first round of technical talks between Pakistan and the IMF concluded on Friday and the global lender will now share nine tables with Pakistan on macroeconomic and financial frameworks.
If the two sides reach consensus on prescriptions to fix the economy by February 9, the two will sign a staff-level agreement.
Prime Minister Shehbaz Sharif has termed the ongoing talks between the two sides, which began on January 31, as “tough”.
Addressing a meeting in Peshawar on Friday, the prime minister said the IMF was giving “tough time” to Finance Minister Ishaq Dar and his team, who had taken tough steps to revive the stalled loan program. indicated.
The Pakistani side explained Prime Minister Shehbaz’s statement to the IMF’s review mission that it was meant to sensitize the public to take drastic measures as politicians want to save their political capital. The IMF team was also told that the prime minister’s statement was not meant to blame the lender for slapping tough conditions on Pakistan.
