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IMF still has concerns over Pakistan budget


© Reuters. FILEPHOTO: A view of the International Monetary Fund logo outside the headquarters building at the IMF/World Bank Spring Meeting in Washington (U.S.A.), April 20, 2018, is possible. REUTERS/Yuri Gripas/File Photo

By Gibran Naiyyar Peshimam

ISLAMABAD, (Reuters) – Pakistan’s Finance Minister said Saturday that although the International Monetary Fund had expressed concerns about Pakistan’s newly unveiled budget plan, the government believes it can address the concern.

Miftah Ismail reported that Pakistan hopes to get a staff agreement with IMF this month.

On Friday, it presented a budget of 9.5 trillion rupees ($47.12 million) for 2022-22-23. This was a tight fiscal consolidation plan to get the IMF to resume its much-needed bailout payments.

Ismail stated that the IMF still has concerns about our budget, numbers and other issues in an interview in Islamabad.

The IMF’s concerns about fuel subsidies, an increasing current account deficit and the need for more taxes were all expressed by he.

The fuel subsidies have been reduced in the past 2 weeks and will likely be removed within the next few days.

Budget estimates proposed also aim to reduce the current account deficit. However, direct tax revenue remains a concern. Ismail stated that “slight differences” remain.

The IMF’s Islamabad resident representative did not respond immediately to our request for comment.

Ismail indicated that Pakistan would try to resolve the problems before the budget is passed by parliament. The financial year of Pakistan runs from July 1, to June 30,

He stated, “If there’s some adjustments that are necessary to bring them aboard, then we will do so.”

Pakistan is now halfway through its 39-month IMF Programme worth $6 billion. The programme has been stalled due to concern by the lender over some of its objectives including fiscal consolidation.

Pakistan needs urgent funds to meet its declining foreign currency reserves of $9.2 Billion, enough to import less than 45 days worth of goods.

($1 = 201.6000 Pakistani rupees)