Pakistan has met all requirements for IMF bailout deal

[ghazi52]

Pakistan has met all requirements for IMF bailout deal, finance official says​

Reuters
July 3, 2024

Pakistan is looking to clinch a staff-level agreement (SLA) on an International Monetary Fund (IMF) bailout of more than $6 billion this month after addressing all of the lender’s requirements in its annual budget, state minister for finance told Reuters.

The country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.

“We hope to culminate this (IMF) process in the next three to four weeks,” Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said on Wednesday, with the aim of thrashing out an SLA before the IMF board recess.

“I think it will be north of $6 billion,” he said of the size of the package, though he added at this point the IMF’s validation was primary focus.

The IMF did not respond immediately to a request for comment.

Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on July 1, a near-40 per cent jump from the prior year, and a sharp drop in its fiscal deficit to 5.9pc of gross domestic product from 7.4pc the previous year.

Malik said the point of pushing out a tough and unpopular budget was to use it as a stepping stone for an IMF programme, adding the lender was satisfied with the revenue measures taken, based on their talks.

“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” Malik said.

While the budget may win approval from the IMF, it could fuel public anger, according to analysts.

“Obviously they (budget reforms) are burdensome for the local economy but the IMF programme is all about stabilisation,” Malik said.

Sakib Sherani, an economist who heads private firm Macro Economic Insights, said a quick deal with the IMF was needed to avoid pressure on Pakistan’s foreign exchange reserves and the currency given the country’s maturing debt repayments and the effects of unwinding of capital and import controls that were applied earlier.

“If it takes longer, then the central bank may be forced to temporarily re-instate import and capital controls,” he said. “There will be a period of uncertainty, and one casualty is likely to be the rally in equities.”

 

[Jayetsena]

Pakistan has met all requirements for IMF bailout deal, finance official says​

Reuters
July 3, 2024

Pakistan is looking to clinch a staff-level agreement (SLA) on an International Monetary Fund (IMF) bailout of more than $6 billion this month after addressing all of the lender’s requirements in its annual budget, state minister for finance told Reuters.

The country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.

“We hope to culminate this (IMF) process in the next three to four weeks,” Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said on Wednesday, with the aim of thrashing out an SLA before the IMF board recess.

“I think it will be north of $6 billion,” he said of the size of the package, though he added at this point the IMF’s validation was primary focus.

The IMF did not respond immediately to a request for comment.

Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on July 1, a near-40 per cent jump from the prior year, and a sharp drop in its fiscal deficit to 5.9pc of gross domestic product from 7.4pc the previous year.

Malik said the point of pushing out a tough and unpopular budget was to use it as a stepping stone for an IMF programme, adding the lender was satisfied with the revenue measures taken, based on their talks.

“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” Malik said.

While the budget may win approval from the IMF, it could fuel public anger, according to analysts.

“Obviously they (budget reforms) are burdensome for the local economy but the IMF programme is all about stabilisation,” Malik said.

Sakib Sherani, an economist who heads private firm Macro Economic Insights, said a quick deal with the IMF was needed to avoid pressure on Pakistan’s foreign exchange reserves and the currency given the country’s maturing debt repayments and the effects of unwinding of capital and import controls that were applied earlier.

“If it takes longer, then the central bank may be forced to temporarily re-instate import and capital controls,” he said. “There will be a period of uncertainty, and one casualty is likely to be the rally in equities.”

Congratulations... Some beather to battered Pakistan. Hope you are out of the mess soon. Politics aside, common man should not suffer.

 

[Dalit]

Of course they have. Now to the next IMF installment. This cycle will never end.

Also congrats from the US by the way:

Ties with Pakistan in best place, says US official

https://www.dawn.com/news/1842764

Relationship in best place... When the Americans claim such things you know that Pakistan is usually in a very bad place.

 

[ghazi52]

Pakistan is poised to finalize a staff-level agreement with the International Monetary Fund for a bailout exceeding $6 billion this month, having met all of the lender’s requirements in its annual budget, according to Minister of State for Finance, Revenue, and Power Ali Pervaiz Malik.

The country has set ambitious revenue targets to secure the IMF loan, aiming to prevent another economic downturn despite domestic challenges. Malik expressed confidence in concluding the process within the next three to four weeks, emphasizing the importance of IMF validation.

Pakistan’s tax revenue target for the fiscal year starting July 1 is 13 trillion rupees ($47 billion), marking a significant increase from the previous year. Malik noted that the tough budget is a crucial step for the IMF program and that the lender is satisfied with the revenue measures implemented.

Economists highlight the urgency of an IMF deal to maintain stability in foreign exchange reserves and the currency amidst maturing debt repayments and eased import controls. Pakistan’s benchmark share index has seen a positive response, reflecting optimism about the impending IMF support.

 

[lightning f57]

40% increase in tax collection is huge. How realistic is this I wonder.

 

[Lulldapull]

40% increase in tax collection is huge. How realistic is this I wonder.

0.2% remaining lower middle class in our cities will foot these increased IMF bills. Baqi saaray remain unaffected.

The guys who will pay up are the ones who've just come a notch above poverty. And the overseas marginalized migrants here will open a new thread on lets already buy the F-thurrtty faav now.......Wes doin great!.......

 

[ACE OF HEARTS]

Bureaucrats, military personnel: Khaqan, Miftah lambaste tax exemptions

ISLAMABAD: Former prime minister Shahid Khaqan Abbasi on Monday criticised the tax exemptions given to civilian...

www.brecorder.com

Only if this exemption is removed can the 40% tax increase target is achievable.