What is IMF’s demand in relation to Budget? Clarity of vision, precise steps, clear outcomes

ISLAMABAD: Minister of State for Finance Aisha Ghaus Pasha Wednesday said the International Monetary Fund (IMF) has sought clarifications about various issues in the budget for the next fiscal year including resources mobilisation, power sector and spending.

While talking to the media after the Senate Standing Committee on Finance meeting, the minister of state said that on Tuesday night virtual meeting was held with the Mission Chief of the IMF with the finance minister on the budget for the next fiscal year and the Fund concern was resources mobilization as well as power sector and spending and sought clarification on various other issues.

Pasha said on the basis of virtual meeting, technical teams would hold meetings on spending as well as resources mobilization and the power sector.

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The minister further stated that power, resources mobilization strategy of the Federal Board of Revenue (FBR) and spending details would be shared with the Fund as the Fund is seeking clarity with regard to what is the government’s vision behind these numbers and how these would be achieved. We will try to convince the IMF about the budget numbers, added the minister.

She said that the primary deficit is important for the IMF and the government has shown positive deficit and so far nothing to this effect was communicated to them.

About the petroleum levy, the minister explained that an increase was proposed in the Finance Bill with the purpose that in case of oil prices in the international market, if there is a need to make an adjustment through PL it can be achieved. At this point in time, she said the government is not considering making any increase in the PL.

To a question whether the IMF has sought an increase in the policy rate, the minister said the policy rate is the domain of the State Bank of Pakistan (SBP) and Fund’s meeting are expected with the SBP in a day or two.

The minister said the IMF has asked questions on many things and sought clarification on a number of issues which would be explained to the fund during the technical-level discussion.

Pasha said the government wants to revive the economy by maintaining stability and does not want to take any measures that would affect the stabilization. The minister said the last fiscal year was very tough because of indigenous and exogenous factors and all of these factors have negatively affected the growth. We will discuss the issue of growth with the Fund and would try to convince them.

When asked Pakistan’s review is not on the agenda of the IMF Executive Board meeting scheduled for June 22, 2023, the minister said the IMF Executive Board meetings are held thrice a week.

Copyright Business Recorder, 2023