ISLAMABAD
The International Monetary Fund (IMF) has assessed an adjustment of over Rs400 billion in the fiscal framework, provided expenditure is also slashed accordingly for the current fiscal year.
The policy level parleys kick-started between Pakistan and the visiting IMF review mission; however, the Ministry of Finance informed the Fund mission that the expenditures were quite rigid and would be hard to reduce proportionally to the level of revenue shortfall. The policy-level talks are expected to continue till Wednesday (tomorrow).
At this point, the FBR high-ups informed the IMF that they would strive to fetch the desired tax collection target of Rs14.13 trillion for the current fiscal year despite witnessing a shortfall in achieving the first quarter target.
It was the IMF’s assessment that the FBR might face a revenue shortfall of more than Rs400 billion for the current fiscal year.
Pakistani negotiators are confident that both the sides would be able to strike staff-level agreement; however, insiders say that it would be a prerequisite to evolve a consensus on the revised macroeconomic and fiscal framework for striking a staff-level agreement.
In the context of the revised macroeconomic and fiscal framework, the IMF would share the draft Memorandum of Economic and Financial Policies (MEFP), and mutual agreement would pave the way for the staff-level agreement. In case of lack of consensus on the draft MEFP, it might result in continuation of parleys owing to evolving consensus on the damages and losses caused by the recent flash floods. — DNA
