Latest news with #fiscalconsolidation
Bloomberg
27-05-2025
- Business
- Bloomberg
Japan Government Panel Warns on Rising Yields' Hit on Finances
A Japanese government advisory panel urged authorities to step up fiscal consolidation efforts, as the Bank of Japan's ongoing monetary tightening efforts raise the risk of higher debt-servicing costs for the world's most indebted developed nation. The Fiscal System Council warned that the BOJ's interest rate hikes and scaled-back bond purchases are fueling a steady rise in government bond yields, and the country's finances need more attention, according to a proposal submitted to Finance Minister Katsunobu Kato on Tuesday.
Bloomberg
24-05-2025
- Business
- Bloomberg
Pakistan's Next Funding Review in Second Half of 2025, IMF Says
Pakistan has reaffirmed its commitment to fiscal consolidation and the International Monetary Fund will conduct its next funding review in the second half of this year, the multilateral agency said. The authorities are aiming for a primary surplus of 1.6% of gross domestic product in fiscal year 2026, the IMF said in a statement after the conclusion of its staff visit to Islamabad led by Nathan Porter. 'Maintaining an appropriately tight and data-dependent monetary policy remains a priority to ensure inflation is anchored within the central bank's medium-term target range of 5–7%,' it said.
Reuters
23-05-2025
- Business
- Reuters
IMF says next Pakistan funding review expected in second half of 2025
May 23 (Reuters) - The IMF expects the next funding review for Pakistan in the second half of 2025 and said it would continue discussions with Pakistan authorities towards agreeing over terms of the budget for the 2026 financial year, it said in a statement on Friday. The IMF's priority remains anchoring inflation within the central bank's medium-term target range of 5–7 percent, the statement said, adding that the Pakistani authorities reaffirmed their commitment to fiscal consolidation while aiming for a primary surplus of 1.6 percent of GDP in FY2026.
CNA
23-05-2025
- Business
- CNA
IMF says next Pakistan funding review expected in second half of 2025
The IMF expects the next funding review for Pakistan in the second half of 2025 and said it would continue discussions with Pakistan authorities towards agreeing over terms of the budget for the 2026 financial year, it said in a statement on Friday. The IMF's priority remains anchoring inflation within the central bank's medium-term target range of 5–7 per cent, the statement said, adding that the Pakistani authorities reaffirmed their commitment to fiscal consolidation while aiming for a primary surplus of 1.6 per cent of GDP in FY2026.
Arab News
22-05-2025
- Business
- Arab News
Pakistan FY26 budget to continue fiscal consolidation, focus on IMF guidelines — analysis
KARACHI: Pakistan will continue fiscal consolidation, focus on IMF guidelines and bring untaxed and low tax areas into the tax net as it announces its federal budget for fiscal year 2025-26 next month, a top Pakistani brokerage house said in a budget review. Islamabad is currently holding budget talks with the IMF, which earlier this month approved a loan program review for Pakistan, unlocking a $1 billion payment which the State Bank of Pakistan said had been received. A fresh $1.4 billion loan was also approved under the IMF's climate resilience fund. 'We expect this budget to continue fiscal consolidation, focus on IMF guidelines and bring untaxed/low tax areas in tax net,' Topline Securities said in a budget review. The brokerage house said the government had committed with the IMF to continue with fiscal consolidation in the FY26 budget to ensure debt sustainability. 'The government targets primary surplus of 1.6 percent of GDP (vs. 2.0-2.1 percent of GDP in FY25), a surplus for the third consecutive year after two decades. The government has also committed to use any windfall dividend expected from the central bank over and above 1 percent of GDP to retire debt,' the review said. The analysis predicted the Federal Board of Revenue's FY26 tax revenue growth target could be the lowest in six years. 'FBR revenue target is expected at Rs14.1-14.3 trillion, up 16-18 percent YoY, which will be the lowest percent growth in the last 6 years,' it said. The FBR has achieved a five-year revenue Compound Annual Growth Rate of 25 percent from FY21-25. 'We believe, out of this required 16-18 percent growth, approximately 12 percent would be achieved through autonomous growth driven by real GDP growth of 3.6 percent and inflation of 7.7 percent. The remaining 4-5 percent growth translates into additional tax measures of Rs500-600 billion,' the analysis estimated. Revenue measures expected include a change in the GST calculation price of sugar, the likely introduction of taxes on pension, retailers and wholesalers and a likely increase in federal excise duty on cigarettes, fertilizer products and pesticides by 500bps. A tax on the income of freelancers, vloggers and YouTubers is also expected. 'Government is expected to announce some relief measures namely (1) extension in exemption limit on salary or reduction of tax rate by 2.5 percent for all salary brackets, (2) rationalization of duties on trade, (3) likely housing finance subsidy, (4) inflation adjustment in minimum salary and unconditional cash transfer, and (5) some rationalization in super tax,' the analysis said. It said the government would reportedly set a GDP growth target of 3.5-4.5 percent 'while we expect GDP growth target for FY26 at 3.5-4.0 percent led by services.' The analysis predicted the budget was likely to be neutral for the stock market in the short-term, neutral to positive for cement, steel, oil and gas, consumers, and independent power producers, and neutral for oil marketing firms, IT, banks, pharma, autos and textile. Pakistan's 37-month $7 billion IMF loan program, approved on Sept. 25, 2024, aims to build resilience and enable sustainable growth. Key priorities include entrenching macroeconomic sustainability through implementation of sound macro policies, including rebuilding international reserve buffers and broadening of the tax base; advancing reforms to strengthen competition and raise productivity and competitiveness; reforming state-owned enterprises and improving public service provision and energy sector viability; and building climate resilience. Highlighting progress in Pakistani policies to stabilize the economy, the IMF said earlier this month when it approved the latest tranche that Pakistan's fiscal performance had been strong, with a primary surplus of 2.0 percent of GDP achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1 percent of GDP. 'Inflation fell to a historic low of 0.3 percent in April, and progress on disinflation and steadier domestic and external conditions, have allowed the State Bank of Pakistan to cut the policy rate by a total of 1100 bps since June 2025,' the IMF added. 'Gross reserves stood at $10.3 billion at end-April, up from $9.4 billion in August 2024, and are projected to reach $13.9 billion by end-June 2025 and continue to be rebuilt over the medium term.'
