ISLAMABAD    -   Talks between Pakistan and International Monetary Fund (IMF) for first quarterly review of Islamabad’s performance under its $6b Extended Fund Facility (EFF) have started on Monday.

A staff mission of the IMF led by Ernesto Ramirez-Rigo has arrived in Islamabad. The officials of ministry of finance informed that in the first stage the visiting delegation is holding technical discussions with government from all the ministries, divisions and departments concerned to examine the latest data. The technical talks would be followed by policy level before conclusion of talks on November 7.

The IMF in July this year had approved a three-year, $6 billion loan to support Pakistan’s economic plan. Pakistan had already received an upfront disbursement of $991 million on completion of all prior actions committed by Pakistan before signing the fund programme.

The IMF had linked the remaining tranches with the economic performance in each quarter. “We hope that Pakistan will receive the next IMF tranche worth of around $450 million as the government had performed well on economic front during first quarter of the current fiscal year,” said an official of the ministry of finance.

He further said that government had successfully controlled the soaring trade and budget deficits during first quarter (July to September) of the year 2019-2020.

Officials informed that visiting IMF team held discussions with the Federal Board of Revenue (FBR) on the first days of its visit. The FBR has provided the data of first quarter performance of the ongoing fiscal year.

The Fund was informed that FBR had faced shortfall of around Rs110 billion in tax collection in July to September period mainly due to reduction in imports of the country. The FBR said that tax collection had recorded handsome growth of 16 percent in overall.

However, at domestic level, tax collection has gone up by 26 percent, which is healthy sign. The FBR also briefed the visiting delegation about the tax reforms introduced by the incumbent government. They said that tax net is continuously broadening due to the efforts of the FBR.

Top officials of ministry of finance said that policies of the incumbent government had started giving results. Trade deficit had narrowed by over 34 percent to $5.7 billion in first quarter (July to September) of the current fiscal year from $9 billion in same period of last year.

The government had also controlled the budget deficit of the country at Rs476 billion in first quarter of the year 2019-2020, which was Rs738 billion in corresponding period of previous financial year.

The International Monetary Fund (IMF) in its latest report has projected an increase in inflation rate for Pakistan from 7.3 percent in 2019 to 13 percent in 2020. The IMF has also revised downward the GDP growth rate from 3.3 percent in 2019 to 2.4 percent in 2020.