IMF to review Govt’s budget plans for next fiscal year for Staff Level Agreement

International Financial Institute (IFI) is reviewing Pakistan’s budget plans for upcoming fiscal year 2023-24 in order to disburse loans to struggling country.

According to International Financial Institute (IFI) country mission chief, Pakistan is reviewing its budget plans for the next fiscal year to revive the delayed program.

According to Reuters, IMF chief in Pakistan Nathan Porter said Pakistan’s budget plans will be discussed as the emergency funding lifeline looms.

International journal Reuters reported that the IMF is one of the last hurdles in meeting key targets for economically troubled Pakistan’s next budget, such as negotiating the fiscal deficit.

The report calls for approval of a staff-level agreement to release $1.1 billion in funding from the IMF after negotiations on the fiscal deficit are completed.

The staff level agreement between Pakistan and the IMF has been delayed since November last year, which is crucial for Pakistan as without it the payments crisis will deepen.

The international journal Reuters said Pakistan’s finance ministry had been contacted for comment but did not immediately respond to Reuters’ request for comment.

Federal Minister for Finance and Revenue Senator Muhammad Ishaq Dar reiterated that Pakistan has already complied with all the preliminary steps for the ninth review with the International Monetary Fund (IMF).

According to the report, the Pakistani authorities had described external financing as an obstacle to the IMF staff level agreement, but now Pakistan has to ensure that the balance of payment deficit is met.

As part of the $6.5 billion bailout package approved by the IMF in 2019, which is set to expire in June, Pakistan has received $3.9 billion by the eighth review.

The government has removed exchange rate caps and imposed taxes, raised energy tariffs, and drastically cut subsidies in an effort to unlock IMF funding.