KARACHI - A team of the International Monetary Fund is scheduled to arrive in Pakistan on May 16 (Friday) to discuss the new budget with the federal government and to take a stock of the economy of the country that had shown slippage in most of the key-economic targets in FY08, The Nation learnt on Tuesday. During their over a week-long visit the IMF team would hold talks with the economic team of the government, discuss the pros and cons of the new budget and suggest measures to control further economic erosion, a source said. The IMF mission would also look into the ongoing tax reforms and their impact on the tax culture and facilitation in the country. Although Pakistan had given up IMF programme since 2005, the Fund would continue the appraisal of the economy under Article VI of the IMF. Sources said that after the en-bloc resignations by the PML(N) from the federal cabinet, the Pakistan Peoples Party government would have to appoint an adviser or minister within this week to ensure smooth sailing of the budget making, to hold talks with the IMF team and other donors in the country. There are also strong indications that the announcement of the new budget might be delayed for a couple of weeks. Traditionally, the new budget is announced in the first or second week of June. However, after the resignations of the PML(N) federal ministers, the PPP government could delay the budget announcement till the last week of June 2008, said sources. According to sources, the ministries of finance, commerce and Federal Board of Revenue have already received budgetary proposals from all the stakeholders and the budget-making process would be geared up after the appointment of new finance minister in place of Ishaq Dar. Sources said that in the new budget the federal government faces the tough task of reigning in the fiscal imbalance, inflation, trade/current account deficits, increase tax revenue and raise foreign exchange from the international markets in the shape of bonds, Global Depository Shares and economic assistance from the multi-lateral donor agencies and major donor countries. Meanwhile, economists and top representatives of the trade and industrial bodies of the country have asked the new government to provide extra relief to the inflation victims of the poorest of the poor in the country in making upcoming federal budget for 2008-08. Soaring trade deficit, highest-ever inflation and sky rocketing oil prices would determine the future of dollar-rupee exchange rate stability. The current forex market regime needs to be looked into a monetary perspective as capital market forces have mandate to take our national currency to a certain level of appreciation and parity against the US dollar, said renowned economist Qazi Masood while talking to The Nation on Tuesday. In spite of making interventions by taking tight monetary measures to remove volatility in forex market, the rupee would remain under pressure verses the US dollar in couple of months keeping in the view of speculative behaviour being practiced in the local equity and forex trading because the latest episode of currency depreciation crisis is artificially created to attain financial ends through this crisis by some big shark-type investors.     He said if the SBP gets injected money into the market then it would take a lead to outflows from the market. Some development experts are of the view that in order to bridging gap between revenue and expenditure, immediate extra measures should be taken  to rescue the manufacturing sector of the economy which can be done by increasing the amount of funds in public sector development projects because expenses on the development project would benefit the industry. Instead of borrowing (budget/fiscal) from the SBP, government should increase tax base. If tax I imposed on stocks & agriculture, there could be an increase Rs 200b in tax collection. Our government is inclined towards trading than production therefore; structural reforms should be switched from consumption-driven growth to export-led growth and value addition in agriculture sector. As far as privatization of public financial and corporate entities is concerned, it is only narrowing import export gap rather than to recover sick industrial units. "Apart from short-term economic challenges ranging from rising inflation, growing trade deficit and energy crisis, the present government would have to make viable, sustained and consistent strategy to tackle long-run challenge of "rent-seeking, ", a phenomenon which describes income disparity amongst various factors of economic contributors. This practice is going on at very fast pace in Pakistan which is derived from low productivity and Pakistan's low competitiveness in global trade" he said. Commodity crises of wheat/flour, sugar, rice, their smuggling to neighbouring countries in the name of export import including price cartels all such sorts of practices done from exporters, traders and industrialists are said to be as an intensive economic crimes which would definitely be persisting in future until unless, our new economic managers are not made transparent and accountable polices on concrete basis to eliminate rent-seeking exercise at big level. Over the past few months, the racketeers from feudal, industrial classes, army, along with civil establishment religious-political representatives stimulated the economic scene of the country more worsen. The current commodity crisis is considered to be as an "ultimate productivity crisis" reflecting power shortage and high cost of doing business in the region.     The ongoing year would remember as a "year of consumers' price hike" in the economic history of Pakistan. Despite achieving impressive growth rate of 7 percent and being a fastest growing and emerging economy in the region, the consumers in the country have been experiencing highest-rate of food inflation for the last 1 year due to the sudden increase recorded in the essential commodities/items by large amounts in the said period. The growing rate of inflation would put further pressure on the economy and may prove threat to macro-economic stability during the upcoming year. To curtail inflation, Sadiqa Salahuddin, Eminent Development Economist advised the policy makers to focus on increasing the production capacity in the real agriculture sector. Indigenous investments either by public sector or private side should be made or encouraged by government to increase agricultural product and inputs, she said, adding the Government must formulate such type of policies and programs which can facilitate in bringing down inflation. It must be noted that most of the milk plants are operating by multinationals.   In order to tackle basic or essential food commodities/items which directly affects common poor masses (such as milk, meat) government should paid extra attention to live stock and dairy farming government should provide advisory support and services to all stakeholders related to agri product. On fiscal side, there is need to extend tax collection or tax net. As far as relation of price-hike food inflation of domestic economy with global soaring oil prices are concerned, she said, our consumers are one of the worst sufferers of consumer taxes which is putting additional pressure on them due to weak, failed and ineffective fiscal policy of the former regime.