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IMF gets ready to talk about Pakistan’s budget as funding lifeline

IMF is getting ready to talk about budget proposals for the upcoming fiscal year, according to the head of the Pakistan mission to the IMF.

-Press Information Department (PID)

KARACHI: According to the IMF’s Pakistan mission chief in an interview with Reuters on Thursday, the IMF is preparing to discuss budget proposals for the upcoming fiscal year, an important step towards finalizing a long-awaited bailout tranche for the financially troubled nation.

Before the IMF can approve a staff-level agreement to disburse $1.1 billion in funding, crucial negotiations over significant budget goals, such as the fiscal deficit, must be completed. For Pakistan to address a severe balance of payments crisis, this financial assistance, which has been delayed for months, is essential.

The $1.1 billion tranche will be released after the ninth staff-level review, which has been on hold since November, is approved. This money comes from a $6.5 billion bailout agreement with the IMF in 2019, which is scheduled to end in June before the budget is approved.

Nathan Porter, the head of the IMF mission to Pakistan, responded that the current plan is to conduct reviews in order, when asked whether it was possible to combine the ninth and tenth reviews due to the impending end of the current program.

According to Porter, “In all IMF programmes, the authorities issue a letter of intent associated with the last review outlining their policy intentions for the period after the programme.”

Reuters has not yet received a response from the finance ministry.

It is worth mentioning that the IMF’s eleventh review under the Extended Fund Facility (EFF) program became due last week, while Pakistan is still working to complete the outstanding ninth review.

Mohammad Ishaq Dar, Pakistan’s finance minister, emphasized on Thursday that Pakistan has already completed all prior actions necessary for the ninth review with the IMF.

According to sources in the Ministry of Finance, the government intends to deliver the 2023–24 federal budget to the National Assembly on June 9 or 10.

The sources state that significant budget-related gatherings will take place, with the Annual Plan Coordination Committee (APCC) being the first to happen in mid-May. The framework for the development budget will be created by this committee.

They also disclosed that a National Economic Council (NEC) meeting regarding the federal budget is scheduled for the first week of June and will be presided over by Prime Minister Shehbaz Sharif.

Written by Aly Bukshi

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