IMF team visited Pakistan from November 11th to 15th to review implementation on about 40 conditions
\n Islamabad
\nFinance Minister Muhammad Aurangzeb has assured that no mini-budget is forthcoming, describing recent talks with the International Monetary Fund (IMF) as \u201cconstructive and purposeful.\u201d
\nIn an interview with a private television channel, Aurangzeb emphasised Pakistan\u2019s commitment to achieving its ambitious tax collection target of Rs12.97 trillion through improved enforcement and administrative measures.
\nHe highlighted the government\u2019s successful attainment of the primary surplus target as a key milestone in the country\u2019s economic stability efforts.
\nThe minister further shared that the National Fiscal Pact had received cabinet approval, ruling out the need for revisions to the National Finance Commission (NFC) framework.
\nHe expressed gratitude towards Sindh\u2019s Chief Minister for supporting the fiscal pact, acknowledging the positive role of Khyber- Pakhtunkhwa (K-P) in matters of national interest.
\nAurangzeb also addressed the recent setback in the privatisation process of Pakistan International Airlines (PIA), noting that while the failed bid was disappointing, efforts to advance privatisation will continue.
\nIMF board to decide on Pakistan case
\nMeanwhile, the International Monetary Fund has decided to place the findings of an unplanned visit to Pakistan before the executive board for a decision after it observed that the $7 billion programme implementation was lagging behind on many counts.
\nIn an official announcement at the end of the five-day visit to Pakistan, the IMF said that \u201cbased on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF\u2019s Executive Board for discussion and decision\u201d.
\nThe issues highlighted by the IMF in its statement suggests that the three-year Extended Fund Facility took a bumpy start soon after beginning of the journey on September 25th when the board approved the package.
\nLed by Mission Chief Nathan Porter, the IMF team visited Pakistan from November 11th to 15th to review implementation on about 40 conditions that the government had accepted.
\nThe IMF shared its \u201cpreliminary findings\u201d through the press release and stated that the detailed findings in the shape of the report would be presented before the Executive Board.
\nThe IMF\u2019s Mission Chief stated that Pakistan and the IMF staff \u201cagreed with the need to continue prudent fiscal and monetary policies, revenue mobilization from untapped tax bases, while transferring greater social and development responsibilities to provinces\u201d.
\nThe issues that Nathan mentioned after the emergency visit are the ones where Pakistan is lagging behind the commitments, said the sources.
\nIn order to meet the IMF\u2019s condition to sign a National Fiscal Pact by four provinces and the Centre till September 30th, the signatories agreed to a muted version that excluded transfer of Benazir Income Support Programme (BISP) to the provinces. The agreement also allowed exception to the condition of handing over the province-specific development project to the respective federating unit.
\nNow the IMF has emphasized in its press statement about the need for \u201ctransferring greater social and development responsibilities to provinces\u201d.
\nThe fiscal pact had been conceived to transfer the expenditure responsibilities that the Center has unconstitutionally taken on its shoulders despite not having fiscal space. The signed version did not achieve this objective.
\nThe Federal Board of Revenue also could not meet its overall tax collection targets and failed to collect due taxes from the traders. The IMF has now pressed in the statement to ensure continued implementation of \u201cprudent fiscal policies (and) revenue mobilization from untapped tax bases\u201d.
\nThe sources said that once the IMF gives its detailed report to management and the board only then the situation on the amount and the timing of the mini-budget would be decided. Punjab has also passed the Agriculture Income Tax law but the enactment gives the authority to set the rates to the government through notification.
\nNathan Porter said that there was also a need for structural energy reforms and constructive efforts are critical to restore the sector\u2019s viability.
\nThe sources said that the discussions were held around how to encourage the use of electricity from the national grid and reduce the cost \u2013in a situation that is the direct outcome of the wrong IMF policies under the previous and the current programmes.
\nPorter said that \u201cPakistan should take steps to decrease state intervention in the economy and enhance competition, which will help foster the development of a dynamic private sector\u201d.
\nTo achieve the objective of decreasing the state intervention in the economy, the IMF has already placed conditions related to the functioning of the Special Economic Zones and drastic changes in the Pakistan Sovereign Wealth Fund Act.
\n\u201cStrong programme implementation can create a more prosperous and more inclusive Pakistan, improving living standards for all Pakistanis\u201d, said Nathan Porter.
\n\u201cWe had constructive discussions with the authorities on their economic policy and reform efforts to reduce vulnerabilities and lay the basis for stronger and sustainable growth\u201d, said Porter.
\nHe said that the IMF was encouraged by the authorities\u2019 reaffirmed commitment to the economic reforms supported by the 2024 Extended Fund Facility (EFF). The next mission associated with the first EFF review is expected in the first quarter of 2025, he added.
\nDuring the five-day visit, the IMF team engaged with the federal and provincial governments, the State Bank, as well as representatives from the private sector on economic developments and policies.
\nThe IMF said that the staff visits are a standard practice for countries with semi-annual programme reviews and aim to engage with the authorities and other stakeholders on the country\u2019s economic developments and policies and the status of planned reforms.
\nHowever, the sources said that no one in Pakistan anticipated and expected the IMF to come only after six weeks of the programme approval.<\/p>\n","protected":false},"excerpt":{"rendered":"
IMF team visited Pakistan from November 11th to 15th to review implementation on about 40 conditions Islamabad Finance Minister Muhammad Aurangzeb has assured that no mini-budget is forthcoming, describing recent talks with the International Monetary Fund (IMF) as \u201cconstructive and purposeful.\u201d In an interview with a private television channel, Aurangzeb emphasised Pakistan\u2019s commitment to achieving […]<\/p>\n","protected":false},"author":2,"featured_media":396423,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-444109","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-news"},"yoast_head":"\n