Mini Budget likely? Govt stance on power, gas prices ahead of IMF talks

ISLAMABAD (Rizwan Abbasi): The government has clarified that despite the tax shortfall, no proposal for a mini-budget is currently under consideration.

According to official sources, if there is pressure from the IMF to reduce the tax target, the final decision will be taken after the upcoming review talks.

Sources say that in the first half of the current fiscal year, the FBR faced a tax shortfall of Rs 330 billion. Despite this, the government has assured that the process of determining electricity and gas prices in a timely manner will continue. Along with monthly and quarterly adjustments of electricity, the basic tariff is also being determined as per the fixed schedule, while gas prices will also be determined on time.

According to sources, the IMF delegation will visit Pakistan from February 25 to March 11. The delegation will first hold talks with the State Bank of Pakistan in Karachi, while formal talks will begin in Islamabad on March 2. The talks will be held simultaneously under the $7 billion Extended Fund Facility (EFF) and the $1.4 billion Climate Financing Program.

According to officials, the third review under the Extended Fund Facility program and the second review of the Climate Financing Program will be discussed. The talks will review the economic performance of the first half of the current fiscal year. In case of successful negotiations, Pakistan is expected to receive a total of $1.2 billion in the next tranches under both programs.

According to sources, so far Pakistan has received $3.3 billion from the IMF under both programs, and currently Pakistan is involved in two IMF loan programs simultaneously.