Pakistan aims to finalize a staff-level agreement with the International Monetary Fund (IMF) this month, exceeding $6 billion, following compliance with IMF requirements outlined in its annual budget.
REVENUE TARGETS AND ECONOMIC OUTLOOK
The country’s annual budget sets ambitious revenue goals to secure IMF approval for the loan, amid domestic discontent over new tax measures. Pakistan targets Rs13 trillion ($47 billion) in tax revenue for the fiscal year starting July 1, a 40% increase from the previous year, aiming to reduce the fiscal deficit to 5.9% of GDP from 7.4%.
MINISTER’S REMARKS
Minister of State for Finance, Revenue and Power Ali Pervaiz Malik expressed optimism about concluding negotiations within three to four weeks, focusing on reaching a staff-level agreement before the IMF board recess. He highlighted the IMF’s satisfaction with Pakistan’s fiscal reforms, particularly regarding revenue measures.
ECONOMIC CHALLENGES AND PUBLIC REACTION
While the budgetary reforms may gain IMF approval, they are expected to provoke public discontent, according to analysts. Malik defended the measures as necessary for economic stabilization, despite their local economic impact.
PRESSING NEED FOR IMF DEAL
Economists underscore the urgency of securing an IMF agreement to alleviate pressure on Pakistan’s foreign exchange reserves, manage maturing debt repayments, and mitigate the impacts of previous capital and import controls.
For further updates, the IMF has not yet responded to media inquiries regarding the potential bailout agreement.
