ISLAMABAD: New amendments will be required in Pakistan’s budget for FY2022-23 in order to attain the key goals of its International Monetary Fund (IMF) program, according to the lender’s representative in the capital.
“Our preliminary estimate is that additional measures will be needed to strengthen the budget and bring it in line with key program objectives,” Esther Perez Ruiz told Reuters.
The federal government announced a Rs9.5 trillion ($47 billion) budget for 2022-23 on Friday that focused on tight fiscal consolidation to convince the IMF to resume necessary bailout payments.
Finance Minister Miftah Ismail stated on Saturday that the IMF had brought up concerns about the budget numbers, including fuel subsidies, an expanding current account deficit, and the need to increase direct taxes.
However, he added that the government was positive that it could adjust the budget accordingly and bring the IMF on board this month.
“Discussions with the authorities continue to obtain more clarity on certain revenue and spending items and allow for a full assessment,” Ruiz said.
She said that the IMF is prepared to support the government’s efforts and initiatives to bring about much-needed macroeconomic stability.
Pakistan is currently in the middle of a $6 billion, 39-month IMF program that has been delayed due to the lender’s doubts about the status of some outlined objectives, including fiscal consolidation.
In the case of a successful review, Pakistan will receive the next tranche of $900 million. It expresses hope that this will lead to other other global funding options as well.
The nation is in urgent need of support measures to tackle the present economic crisis, triggered by depleting foreign exchange reserves that have reached $9.2 billion — an amount only sufficient for less than 45 days of imports.