ISLAMABAD: Both Pakistan and the International Monetary Fund (IMF) will try again on Monday (today) to continue the technical-level talks as the fiscal gap remains a sticking point.
According to The News, the policy-level talks between the two parties, which were scheduled to begin today, will begin on Tuesday (tomorrow).
According to the Fund’s assessment, Pakistan had a primary deficit gap of 0.9% of GDP, or Rs800-850 billion, primarily due to decreased tax and non-tax revenue and increased spending.
However, the Pakistani side refused to accept such a fiscal gap, claiming that it was estimated to be between Rs400 and Rs450 billion for the current fiscal year, or 0.5 and 0.6% of GDP.
The lender with headquarters in Washington estimated that the Federal Board of Revenue of Pakistan (FBR) might not be able to collect the desired Rs7,470 billion in taxes.
The reduced electricity tariff for the export-oriented sector might be eliminated and linked to export proceeds if the government and IMF come to an agreement.
Since the textile industry sells 40 percent of its products on the domestic market, it is wrong to get subsidies for power and gas prices across the board.
During the technical level talks, there are still disagreements regarding the precise fiscal gap between Pakistan and the visiting IMF review mission. The additional taxation measures that will be revealed through the upcoming mini-budget will be firmed up once it is finalized with the IMF. Because the fiscal gap figure has not been reconciled, technical level talks will continue on Monday, and policy level talks are expected to start on Tuesday,” sources told a select group of reporters during background discussions on Saturday.
The first round of technical talks between Pakistan and the International Monetary Fund (IMF) came to an end on Friday, and now the global lender is expected to share nine tables containing Pakistan’s macroeconomic and fiscal framework.
A staff-level agreement will be signed if both parties can agree on solutions to the economy’s problems by February 9.
Prime Minister Shehbaz Sharif has described the ongoing negotiations between the two sides, which began on January 31, as “tough.”
At a meeting in Peshawar on Friday, the premier said that the IMF is giving Finance Minister Ishaq Dar and his team “a tough time,” hinting at harsh measures to be taken to restart the stalled loan program.
The Pakistani side explained that PM Shehbaz’s statement to the visiting IMF review team was meant to convince people to take tough measures because politicians wanted to save their political capital. Additionally, the IMF team was informed that the PM’s statement was not intended to attribute the lender’s harsh conditions to Pakistan.
