Islamabad: On Tuesday, the Finance Ministry shared the details of the next budget with the International Monetary Fund (IMF) on the instructions of Prime Minister Shehbaz Sharif.
On Monday, the prime minister approached IMF managing director Kristalina Georgieva to revive the $6.5 billion bailout package, apparently in a last-ditch effort to avoid default.
In a related development, the IMF’s mission chief in Pakistan, Nathan Porter, said his organization was in touch with Pakistani officials for a meeting of the International Lenders’ Board.
Sources in the finance ministry said that the government is trying to reach an agreement with the IMF before approving the budget for the next financial year.
As part of these efforts, preliminary proposals for the next budget have been shared with the IMF, he added.
Sources say that the IMF will review the budget proposals prepared by the government and discuss them with the finance ministry officials.
According to sources, the new budget documents shared with the global lender contained proposals for key targets including tax collection, debt repayment and subsidies.
In the upcoming budget, it is proposed to allocate up to 8 trillion rupees for repayment of loans and interest.
Sources said that Pakistan wants to complete the current program with the IMF by June 30, after which Pakistan is also willing to discuss the next program with the international lender.
Separately, Porter said the IMF was in contact with Pakistani officials to pave the way for a board meeting before the financing program expires at the end of June.
Generally, board meetings on program reviews require prior agreement at the staff level, which in Pakistan’s case is $1.1 billion in financing for the country as part of a $6.5 billion IMF package. will open
The staff-level agreement was postponed from November 2022.
“This engagement will focus on restoring proper foreign exchange market functioning, approving the FY24 budget in line with program goals, and providing adequate financing,” Porter added.
Finance Minister Ishaq Dar said that the government will try not to burden the public in the upcoming budget but its hands are tied due to the IMF programme.
Addressing a function in Lahore, the federal minister further said that whenever the country’s economy started to grow, it suffered a setback.
Dar said that Pakistan Muslim League-N has transformed Pakistan into the 24th best economy in the world in the past.
He added that he would like the IMF to clear its 9th review before the budget as all the conditions for that have already been met.
The minister claimed that the country suffered because the previous PTI government failed to fulfill its commitments to the IMF.
Dar said that the economy of the country has sunk in the last three years.
He further said that for the last three months there were speculations about Pakistan defaulting on external payments.
However, he pointed out that since Pakistan had not yet defaulted, critics at home and abroad were disappointed.
Dar said that the nation must bear this difficult time together and put the country back on the right track. (with input from our Lahore representative and agencies)
