AHEAD of its crucial talks with the cash-strapped Pakistan Government, the IMF has found an over Rs 2,000 billion breach in budgetary estimates for 2022-23 in its initial assessment that might result in escalating the budget deficit and primary deficit targets with a massive margin. Pakistan and the International Monetary Fund (IMF) officials are scheduled to kick-start parleys from Tuesday for accomplishing the ninth review under the Extended Fund Facility during which the fiscal slippages and reconciliation of figures will be the major topic of discussion. The review would lead to the release of the next tranche of funds to Pakistan which has been pending since September. The Government had envisaged a budget deficit target of 4.9 per cent of the gross domestic product (GDP) and a primary deficit to keep it at positive 0.2 per cent of the GDP on the eve of the budget announcement for 2022-23.

 

According to sources quoted by The News, the IMF is currently asking Pakistani authorities to take additional taxation measures worth Rs 600 billion through a mini-budget. The sources told the newspaper that Pakistani authorities did not agree to it at all and argued that the primary deficit would not escalate up to such an extent at all. The IMF has identified a breach worth Rs 2 trillion in budgetary estimates for the fiscal year 2022-23, warning that the primary and budget deficits could escalate with a massive margin, the report added. The senior officials of the IMF have also taken the decision that they will incorporate a hike in circular debt of Pakistan’s cash-bleeding energy sector beyond the agreed limit with the lender of the last resort as part of the primary deficit for the current fiscal year 2022-23.