Finance Minister Ishaq Dar said on Thursday that the coalition government has shared its budget figures with the International Monetary Fund (IMF), hoping to unlock the ninth review as “there is no problem with the numbers.” “.
The government is under intense pressure from the IMF to tighten its purse strings to unlock one more final tranche of a major bailout package.
Under the terms of the IMF, Pakistan had to end subsidies on energy and other sectors, allow the rupee to float against the US dollar, increase taxes and duties, and limit imports.
“Prime Minister [Shehbaz Sharif] agreed to give the numbers, I was not ready at first. These are the numbers we will share with you. There is nothing in the budget that is objectionable,” Dar said.
His comments came as he unveiled the Economic Survey for the outgoing fiscal year 2022-23, which showed that Pakistan had failed to meet any of its economic growth targets.
Pakistan must satisfy the International Monetary Fund (IMF) on three issues, starting with a budget to be presented on Friday, before its board will consider whether to extend the loan under the programme. At least $2.5 billion will also be released, an official said, expiring at the end of this month.
There is only time for a final review by the IMF’s board before the scheduled end of the $6.5 billion Expanded Fund Facility (EFF), IMF Resident Representative for Pakistan Esther Perez Ruiz said on Thursday.
“As officials have been informed, there may be one remaining board meeting under the current EFF at the end of June,” Ruiz said in an emailed response to Reuters.
“To pave the way for a final review under the existing EFF, restore the proper functioning of the FX market, pass the FY24 budget in line with program objectives, and close the $6 billion gap going forward with a robust and credible It is important to secure the financial commitments of the board,” he added.
The finance minister backed up his claim that the numbers were not objectionable, saying the government was not planning to provide any subsidy.
He said that to achieve the GDP growth rate of 3.5 percent, the government aims to reduce fiscal deficit in the budget and increase growth and revenue.
In response to a question, he said that although the government needs to move towards development, it needs to address the problems of the people, especially inflation.
“Obviously, we have to keep inflation and people’s issues in mind,” Dar said, adding that he would do everything in his power to provide relief to the common people.
Inflation has risen, the rupee has depreciated and the country can no longer afford imports, leading to a sharp decline in industry.
Pakistan’s economy is grappling with a balance of payments crisis as it struggles to meet high levels of external debt, while months of political chaos have deterred potential foreign investment.
The grim figures leave little room for the cash-strapped government to introduce measures to attract popular votes in Friday’s budget ahead of elections in October.
But Dar was adamant that Pakistan was on the road to recovery and that coalition partners had sacrificed their political capital to ensure the country was kept afloat.
“It was very challenging for the government to make such drastic reforms and we had to pay a political price,” Dar said.
“But I believe it was worth it because Pakistan’s reputation was lost. We took several steps to correct the course,” the minister said.
“I am hoping that when the IMF program is completed, we will have two payments in line – $450 million from the World Bank and $250 million from the AIIB.”
“We’ve deferred the default for now.”
