IMF prepares to discuss Pakistan budget plans as funding lifeline nears

IMF prepares to discuss Pakistan budget plans as funding lifeline nears. The International Monetary Fund (IMF) is preparing to discuss budget plans for the coming financial year, as part of a long-awaited bailout tranche from the lender for the cash-strapped nation, the IMF’s Pakistan mission chief told media on Thursday.

Negotiations over key budget targets such as the fiscal deficit are one of the last hurdles before the IMF approves a staff-level agreement to release $1.1 billion in funding, which has been delayed for months, that is crucial for Pakistan to resolve an acute balance of payments crisis.

A successful staff level agreement for the ninth review, which has been pending since November, will unlock the $1.1 billion tranche. The funding is a part of a $6.5 billion bailout package the IMF approved in 2019, which is due to end in June, prior to the budget.

In response to a question about the possibility of combining the ninth and tenth reviews in light of the imminent end of the latest programme, Nathan Porter, IMF mission chief to Pakistan, said that the current baseline is to proceed sequentially with reviews.

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“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,” said Porter.

The finance ministry did not immediately respond to Reuters request for a comment.

It should be noted that the IMF’s eleventh review under the Extended Fund Facility (EFF) programme also became due last week at a time when Islamabad is still unable to accomplish the pending ninth review.

On Thursday, Finance Minister Mohammad Ishaq Dar reiterated that Pakistan has already complied with all the prior actions for the ninth review with the IMF.

Sources in Ministry of Finance told a private news channel that the government is planning to present the federal budget 2023-24 in the National Assembly on June 9 or 10.

The sources said that the government would be convening key meetings relating to the federal budget, starting with the Annual Plan Coordi­nation Committee (APCC) in mid-May. It will prepare the outline of the development budget.

They added said that the meeting of the National Economic Council (NEC) — under the chair of Prime Minister Shehbaz Sharif — regarding the federal budget will be held in the first week of June.