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Hans India
14-05-2025
- Business
- Hans India
Pakistan receives second tranche of IMF funding, to begin budget discussions virtually
Islamabad: Pakistan is scheduled to start virtual discussions with the International Monetary Fund (IMF) on the country's upcoming fiscal budget after the visit of the IMF mission was delayed due to security reasons amid the ongoing tensions between India and Pakistan which have affected flight operations nationwide. Sources said that the IMF virtual talks holds pivotal value as the country's government will present Pakistan's proposed budget details to the newly-elected IMF mission chief to Pakistan. "We still hope that the new mission chief would be able to travel to Islamabad over the weekend, which is subject to security situation. However, the adjustment to have the discussion virtually would not affect the work or the original programme schedule," said one official. Details revealed that the first round of the virtual discussions will start on Wednesday and continue for at least three days. "Discussions are expected to be held virtually for the first leg. For the second leg of the talks, the IMF team is expected to arrive in Islamabad on Saturday and stay till May 23," a source said. The IMF discussion on the fiscal budget are happening at a time when Pakistan received its second tranche of funding from the IMF under the Extended Funding Facility (EFF). Pakistan's State Bank confirmed that it has received Special Drawing Rights (SDR) Rs 760 million ($1.023 billion) as part of the second tranche under the IMF EFF programme, adding that the latest disbursement will be recorded in the country's foreign exchange reserves. The latest disbursement of IMF's second tranche to Pakistan follows an approval from the IMF Executive Board on May 9. The IMF also cleared a $1.4 billion funding arrangement under the Resilience and Sustainability Facility (RSF) to support Pakistan's climate resilience initiatives during the meeting. IMF has appointed a new mission chief for Pakistan, Iva Petrova, who is expected to lead the discussions along with the outgoing IMF mission chief Nathan Porter who carried the reputation of being strict on policy issues and kept a hawk eye on Pakistan finance ministry's media policy. 'Pakistan will unveil the budget for fiscal year 2025-26 on June 2, making it the second budget presentation of the sitting finance minister Muhammad Aurangzeb. The factors of the budget have to be in line with the parameters set during the current meetings with the IMF," said a government source, highlighting the critical importance of the IMF budget discussions. Experts say that the fiscal budget for the year 2025-26 is expected to be another tough one for the government and the people at large. 'Pakistan is expected to formulate the budget on the assumption of having 1.6 per cent of the country's GDP primary budget surplus. This would require the government to generate at least Rs two trillion over and above the non-interest expenses," said economic expert Shahbaz Rana. "Tax target for the Federal Board of Revenue (FBR) is proposed to be at least 11 per cent of the GDP. IMF will review if the Pakistan government is setting credible and realistic targets and measures to back its new tax targets," he added. The defence budget is also expected to be increased, while the overall budget to be presented hovers around Rs 18 trillion. "The overall budget deficit target after incorporating large provincial cash surpluses is projected at 5.1 per cent of the GDP or Rs 6.7 trillion," said Rana. On the other hand, the IMF has already set multiple pre-conditions, which Pakistan said it has fulfilled despite initial setbacks. "Pakistan has met the IMF targets for a primary budget surplus by the federal government, as well as net revenue collection and cash surplus targets by the four provinces. This is why the talks with the IMF on the upcoming fiscal budget may not be as tough," Rana said. "However, the Federal Board of Revenue (FBR) has miserably failed in multiple domains on its enforcement measures in areas including track and trace, compliance risk management and retailers scheme, and has failed in its tax collection drive', Rana added. Pakistan is hopeful that its past performance and the recent release of the second tranche of IMF, would justify its compliance to the IMF conditions, paving the way to a successful discussion before the fiscal budget in June 2025.
Time of India
14-05-2025
- Business
- Time of India
IMF to hold virtual discussions on Pakistan's budget after approving $1.023 billion tranche
The International Monetary Fund (IMF) will hold virtual discussions on Wednesday to review Pakistan's upcoming budget , after postponing its visit to Islamabad due to security concerns in the region. Meanwhile, Pakistan's central bank confirmed that the IMF has released a second tranche of $1.023 billion under the Extended Fund Facility programme. The federal government is expected to present the budget for the 2025–26 fiscal year on June 2. IMF talks will continue until May 16. The central bank said the $1.023 billion second tranche will be included in the foreign exchange reserves for the week ending May 16. The IMF board approved this amount last week under the ongoing Extended Fund Facility, alongside an additional $1.4 billion Resilience and Sustainability Facility arrangement. The funds' release followed the IMF's positive assessment of Pakistan's economic reform programme's first review under the EFF Arrangement. The bank noted, "Fiscal performance has been strong, with a primary surplus of two per cent of gross domestic product achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1 per cent of GDP." Government sources informed The Express Tribune on Tuesday that the IMF has appointed a new mission chief to Pakistan, with the mission expected to visit Islamabad over the weekend, subject to security conditions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Scarlett Johansson, 40, Shows Off Her Real Size In A New Vacation Photos 33 Bridges Undo The mission's scheduled Tuesday arrival was postponed due to air travel disruptions caused by ongoing India-Pakistan tensions. Sources told PTI, "Virtual discussions are expected to be held from today. For the second and final leg of the talks, the IMF team is expected to arrive in Islamabad on Saturday and stay until May 23." The IMF has selected Iva Petrova, a staff member of Bulgarian origin, as the new Mission Chief to Pakistan. She will participate in discussions alongside outgoing Mission Chief Nathan Porter, who served an extended term. The IMF has requested Pakistan to prepare a budget targeting a primary surplus of 1.6% of GDP, necessitating generation of approximately Rs 2 trillion above non-interest expenses. The Federal Board of Revenue's (FBR) tax target is proposed at 11% of GDP, or Rs 14.3 trillion. The IMF has set several fiscal conditions, which Pakistan has met so far, keeping the programme on track despite initial setbacks, as per the bank. Last week, India abstained from voting at the International Monetary Fund's Executive Board meeting, expressing serious concerns about IMF bailout packages for Pakistan. India highlighted Pakistan's status as a long-term IMF borrower with poor compliance regarding programme conditions. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
