Additional actions would be required to keep Pakistan’s fiscal year 2022-23 budget in line with the IMF‘s program’s core objectives, the lender’s resident representative in Islamabad said on Monday.
On Friday, the federal government released a Rs9.5 trillion budget for 2022-23, targeted at stringent budgetary reduction in order to persuade the International Monetary Fund to resume much-needed bailout disbursements.
“Based on our early assessment, additional steps will be required to reinforce the budget and align it with key programme objectives,” Esther Perez Ruiz told Reuters.
The IMF had highlighted worries about the budget numbers, including fuel subsidies, a worsening current account deficit, and the need to raise more direct taxes, according to Finance Minister Miftah Ismail, who spoke to Reuters on Saturday.
He did say, though, that his government was confident in its ability to amend the budget in order to get the IMF on board, and that he hoped for a successful review this month.
“Discussions with authorities are continuing to provide greater clarification on certain revenue and spending issues, allowing for a comprehensive review,” Ruiz added.
She stated that the fund was ready to continue to assist the authorities in their efforts to maintain macroeconomic stability, as well as in the execution of policies to do so.
Pakistan is halfway through a $6 billion, 39-month IMF programme that has come to a halt due to the lender’s concerns about the status of certain of the program’s goals, such as budgetary reform.
Pakistan will receive $900 million in the next tranche if the review goes well, and an IMF approval would also open up other global finance options.