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IMF prepares to discuss Pakistan budget plans as funding lifeline nears

KARACHI: The International Monetary Fund (IMF) is preparing to discuss budget plans for the 2019 fiscal year as part of the lender’s long-awaited bailout tranche for the cash-strapped country, the head of the IMF’s Pakistan mission told Reuters on Thursday.

Negotiations over major budget targets such as the fiscal deficit are one of the last barriers to be cleared before the IMF accepts a staff-level agreement to release $1.1 billion in cash, which has been delayed for months and is critical for Pakistan to manage a severe balance of payments problem.

The $1.1 billion tranche will be released if the staff-level agreement for the ninth review, which has been pending since November, is successful. The funding is part of a $6.5 billion bailout deal authorized by the IMF in 2019 which is set to expire in June, before the budget.

In answer to a question concerning combining the ninth and tenth reviews in light of the upcoming completion of the present programme, Nathan Porter, IMF mission chief in Pakistan, stated that the current norm is to proceed with reviews sequentially.

“In all IMF programs, the authorities issue a letter of intent in conjunction with the last review outlining their policy intentions for the period following the program,” Porter explained.

The finance ministry did not immediately respond to a request for comment from Reuters.

It should be recalled that the IMF’s eleventh review under the Extended Fund Facility (EFF) programme became due last week, but Islamabad remains unable to complete the outstanding ninth evaluation.

On Thursday, Finance Minister Mohammad Ishaq Dar stated that Pakistan has already completed all prior actions for the IMF’s ninth assessment.

According to Ministry of Finance sources, the government intends to present the federal budget 2023-24 to the National Assembly on June 9 or 10.

According to the sources, the government would hold crucial meetings related to the federal budget, beginning with the Annual Plan Coordi­nation Committee (APCC) in mid-May. It will draft the development budget blueprint.

They also stated that the National Economic Council (NEC) meeting on the federal budget, chaired by Prime Minister Shehbaz Sharif, will take place in the first week of June.

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