ISLAMABAD - Pakistan and the International Monetary Fund (IMF) have started talks for a fresh bailout package under the Extended Fund Facility (EFF) yesterday, which would be the country’s 24th IMF’s programme.
An IMF delegation is currently visiting Pakistan to discuss the new loan programme. Talks are expected to continue for the next few days. Pakistan has recently completed the IMF’s standby-programme worth $3 billion and the country had requested for a fresh loan programme under the EFF. The volume of the loan programme would be decided in the ongoing talks. This would be Pakistan’s 24th IMF programme. The IMF mission led by Mr. Nathan Porter, IMF Mission Chief, called on Finance Minister Aurangzeb at the Finance Ministry to kickstart the discussions on further engagement with the Fund. The meeting was attended by Governor State Bank of Pakistan, Chairman Federal Board of Revenue, and senior officers of the Finance Ministry.
The finance minister apprised the IMF team of the improvement in the macro-economic indicators over the course of the SBA and underscored the government’s commitment to continue with and expand upon the reform agenda.
During the first day, the IMF delegation met with the officials of the ministry of finance and Federal Board of Revenue for exchange of the economic data. Besides discussing the fresh loan programme, both the sides would also discuss the basic contours of the annual budget for next fiscal year, which is likely to be announced in the first week of June this year.
Last week, the IMF had made public its projections on macroeconomic targets for the next fiscal year. According to the IMF’s estimates, Pakistan’s gross external financing needs are $21.04 billion for the next year. The Fund has projected the country’s current account deficit at 1.2 percent or $4.55 billion for the upcoming fiscal year. Pakistan’s total revenues are estimated to be Rs15.5 trillion for the next financial year, which is almost Rs2 trillion more than the current year’s Rs13.36 trillion. Of this, federal revenue should go up to Rs13.3 trillion next year. The FBR’s tax collection would be Rs11.11 trillion, showing an increase of Rs1.7 trillion over the current fiscal year’s Rs9.415 trillion.
According to the documents published by the IMF, the petroleum levy collection are projected to reach Rs1.08 trillion next year compared to the current year’s budget target of Rs869 billion, which has now been revised to Rs923 billion. Interest payments would continue to rise next year by Rs1.4 trillion to reach Rs9.8 trillion when compared to Rs8.37 trillion by the end of the current year. The total expenditure is estimated to cross Rs24.7 trillion next year against Rs21.3 trillion this year. Current expenditure would surpass Rs22 trillion next year against Rs19.1 trillion this year.
