ISLAMABAD (Eshfak Mughal):- Pakistan has received combined economic and financial targets for the seventh and eighth reviews of its International Monetary Fund bailout program.
After passing the budget of the next fiscal year from the Parliament, an important phase of negotiations between Pakistan and the International Monetary Fund (IMF) is likely to start from tomorrow for revival of the stalled loan program.
Sources said that the coalition government would likely to get approval of the budget on 29 June (tomorrow) from Parliament that will be enforced from 1st July.
Once the parliament approves the budget, negotiations with the IMF will be kicked off for the revival of the stalled program and the loan agreement will be signed during the talks, sources in the Finance Ministry said. On behalf of Pakistan government, the Finance Minister and the Governor State Bank will sign the agreement.
Pakistan has received combined economic and financial targets for the seventh and eighth reviews of its International Monetary Fund bailout programme, the finance minister said on Tuesday.
On Twitter, the finance minister, Miftah Ismail, said the government had received the lender’s Memorandum of Economic and Financial Policies (MEFP) for both reviews, following meetings last week, said Finance Minister Miftah Ismail
Clubbing of 7th & 8th review of Pakistan’s Progam supported by the EFF facility of IMF could likely mean a tranche of around $ 2 bn for the country, said Dr Khaqan Najeeb, former spokesman of the Finance Ministry.
It is important to mention here that the Pakistani authorities have requested to increase the loan program from $6 billion to $8 billion with the extension of one year, sources said. Pakistan wants to extend the duration of the program till 2024 which was scheduled to be expired during Sept 2022.
On 2019, previous government had secured IMF loan program worth of $6 billion. The program was stalled twice due to non-compliance of IMF conditions. The IMF has had suspended the loan program on 2021 during the PTI government. The Fund had revived the program on Feb 2022 after getting parliamentary approval of mini-budget and amendments regarding the autonomy of State Bank of Pakistan.
Sources further said that the government has amended the budget targets and total volume of the budget outlay for the next fiscal year according to the IMF’s directions.
Pakistan government has agreed to increase the total budget size from Rs9.5 trillion to Rs10 trillion for next fiscal year, sources said.
The government has agreed to levy 11% sales tax and Rs 50 per litter levy (phase wise) on petroleum products from July 1, sources said
They further said that the government has accepted the IMF’s condition to increase tax collection target from Rs.7005 to Rs.7450 billion for the next fiscal year.
Consequently, the government has agreed to increase customs collection target from Rs.950 billion to Rs.1005 billion. The government has also increased the target of GST collection from Rs.3,008 to Rs.3,300 billion, sources said.