Pakistan has to go for new IMF programme: If 5th Review talks fail

Pakistan has to go for a new International Monetary Fund (IMF) programme if it fails to convince the Fund in the talks under the Fifth Review expected to be held in August. Well-placed sources told Business Recorder here on Friday that the discussions with the IMF for the Fifth Review under Stand-By Arrangement (SBA) programme were expected to be held in July.
"But Pakistan has not sent the request for review to the Fund so far. That is why it is being expected that the review would take place in August as the concerned authorities are trying their level best to take all the macroeconomic measures to satisfy the IMF team," sources added. Sources said as one of the major macroeconomic strategic measures, the Federal Board of Revenue has provisionally collected Rs 1590.462 billion as net revenue during 2010-11 against the target of Rs 1588 billion, reflecting an enormous growth of Rs 2.462 billion which, according to the government authorities, would help remove apprehensions of the IMF.
It has been decided by the government to take certain measures for the fiscal year 2011-12. These steps include 4 percent fiscal deficit (Rs 810.64 billion) instead of 4.5 percent (Rs 912 million), the net revenue of Rs 1543 billion estimated to be available to federal government, and the overall allocation of subsidies after a slash of 20 percent is estimated at Rs 225 billion against the budgetary allocation of Rs 283 billion for the outgoing fiscal year, total revenue collection is projected at 2.737 billion for the next fiscal year.
They maintained, "If Pakistan fails to satisfy the IMF, the programme would be suspended as the Fund has already provided a nine-month extension to Pakistan's Stand-By Arrangement (SBA), to September 30, 2011. So, in that case, the rest of $ 3.2 billion of the programme would not be provided to Pakistan."
Sources said the country needs foreign assistance as it is possible only when the IMF gives a green signal to the other donors by providing 'Letter of Intent.'