Amid controversy over new petrol prices announced by the government, which has been described as a “reckless” decision, Finance Minister Ishaq Dar will visit Washington next week and meet the International Monetary Fund (IMF), which Efforts will be made to revise the macroeconomic framework.
“Pakistan’s Finance Minister Ishaq Dar will attend the upcoming IMF/WB annual meeting,” a senior finance ministry official confirmed to The News on Wednesday.
In a surprise move last week, the federal government slashed the prices of petroleum products, sparking debate over whether the move was in line with the IMF agreement and former minister Miftah Ismail calling it a “reckless” move.
However, Dar responded to his predecessor by saying that he knew how to deal with the IMF, while Minister of State for Finance Ayesha Ghospasha added that the announcement did not violate the loan agreement.
The IMF also said that the policy commitments made by the Pakistani authorities as part of the seventh and eighth reviews under its support program continue to apply.
The publication quoted unnamed sources as saying that Pakistan has asked top IMF officials for the current fiscal year 2022-23 to adjust the macro-economics for a slowdown in GDP growth, an increase in inflation and an upward adjustment of the twin deficits. will make a formal request for revision of the framework. Like budget deficit and current account deficit.
Islamabad is set to request the IMF to ease the conditions attached to the Expansion Fund Facility (EFF), particularly freezing the electricity fuel price adjustment and petroleum development levy on POL products for the next few months. To provide some relief to People suffering from inflation.
Pakistan will also request a relaxation of the budget deficit target for the current fiscal year as severe floods could undermine its revenue mobilization efforts and increase pressure on the expenditure front, the report said.
The government has narrowed the budget deficit target for the current fiscal year to 4.9 percent under the IMF program and posted a revenue surplus of Rs 153 billion by the end of June 2023.
The revision of the macroeconomic framework will be requested for the current fiscal year in the wake of severe floods that have wreaked havoc and required more than $30 billion in reconstruction costs for Pakistan’s struggling economy.
According to the report, Secretary Economic Affairs Division Kazim Niaz has already left Islamabad for Washington to attend the upcoming meeting of Bretton Wood Institutions.
Under the macroeconomic framework, the government has estimated that the country’s GDP growth could be around 2 percent for the current fiscal year against the initial target of 5 percent.
The economic loss for the current financial year is estimated at Rs 2.4 trillion. Government estimates also show that 1.8 to 2 million job losses will increase unemployment estimates and could increase poverty by 4.5 to 5 percent, which means 9 to 12 million People will come below the poverty line.
Agriculture growth is expected to remain negative in the range of -0.7% to -2.1% against the target of 3.9% for the current fiscal year. The government has estimated that the growth of major crops is expected to be negative in the range of 14 to 15.4 percent for the current fiscal year. About one million animals, big and small, have died. Livestock growth is expected to be in the range of 2-3 percent for the current financial year against the target of 3.7 percent.
Inflation will pick up, rising in the range of 23 to 25 percent for the current fiscal year, compared to an initially expected target of 11.5 percent.
The government is yet to give a specific figure for the current account deficit, but it is expected to widen from $9 billion to $12 billion for the current fiscal year, mainly due to a decline in exports.
