ISLAMABAD - An International Monetary Fund’s team will visit Pakistan from January 28 to review the economic situation of the second quarter (October-December) of the current fiscal year before releasing third tranche under extended fund facility.
“IMF team would visit Pakistan from January 28 for second review before releasing another tranche under extended fund facility (EFF) in March 2014”, said Secretary Finance Dr Waqar Masood Khan while talking to The Nation on Saturday. The team would review the economic performance of the country for second quarter of the ongoing financial year 2013-2014.
Sources informed that Pakistan might face tough questions on the government’s investment incentive scheme that has been announced by the government, as scheme is supposed to undermine the goal of improving tax collection and enforcement over time. Similarly, the Fund would seek details regarding ‘non-payment’ of income tax by parliamentarians, as reported by the media.
Similarly, the government might also face tough questions regarding FBR’s performance during first half (July-December) of the ongoing fiscal year, as FBR is not achieving desired growth of 28 per cent to reach the annual tax collection target of Rs 2475 billion. However, on the other hand, Pakistan would inform IMF that privatization process has been started by the government, as eight public sector entities are in privatization process. Similarly, the government has controlled the budget deficit at 2.5 per cent of the GDP during first half (July-December) of the ongoing fiscal year, which seems a positive sign.
The IMF had already released two tranches worth of $1.09 billion for Pakistan under EFF. The facility amounting to Special Drawing Rights (SDR) 4.393 billion ($6.64 billion, or 425 percent of Pakistan’s quota), was approved by the Fund on September 4, 2013. The EFF is a 3-year arrangement for Pakistan by the IMF to support the country’s economic reform programme to promote inclusive growth.
The IMF had announced that it would evenly disburse the remaining amount over the duration of the programme, subject to the completion of quarterly review . Therefore, the Fund team would visit Pakistan from January for second review before releasing $540 million.