It added that the budget “advances a primary surplus of around 0.4 per cent of GDP by taking some steps to broaden the tax base and increase tax collection from undertaxed sectors, as well as improving progressivity, while ensuring space to strengthen support for the vulnerable through the BISP (Benazir Income Support Programme)”. The IMF noted that the parliament had approved the FY24 budget “in line with the goals of supporting fiscal sustainability and mobilising revenue, which will enable greater social and development spending”. It further said, “Steadfast policy implementation is key for Pakistan to overcome its current challenges, including through greater fiscal discipline, a market-determined exchange rate to absorb external pressures, and further progress on reforms, particularly in the energy sector, to promote climate resilience, and to help improve the business climate.” “The new SBA will also create space for social and development spending through improved domestic revenue mobilization and careful spending execution to help address the needs of the Pakistani people,” the IMF said. It added that the new SBA will “support the authorities’ immediate efforts to stabilise the economy from recent external shocks, preserve macroeconomic stability and provide a framework for financing from multilateral and bilateral partners”. Meanwhile, the IMF’s press release states, “The IMF staff and the Pakistani authorities have reached a staff-level agreement on policies to be supported by a Stand-By Arrangement (SBA).” “Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead,” he said. Liquidity conditions in the power sector also remain acute,” Porter said in a statement. “Despite the authorities’ efforts to reduce imports and the trade deficit, reserves have declined to very low levels. Inflation, including for essential items, is very high,” he added. “As a result of these shocks as well as some policy missteps - including shortages from constraints on the functioning of the FX market - economic growth has stalled. The new stand-by arrangement builds on the 2019 programme, IMF official Nathan Porter said in a statement on Thursday, adding that Pakistan’s economy had faced several challenges in recent times, including devastating floods last year and commodity price hikes following the war in Ukraine. “We have stopped the decline, now we have to turn to growth,” he added. The new deal will disburse an upfront amount of $1.1 billion shortly after the IMF board’s meeting in July, he said.ĭar said Pakistan aimed to take the central bank’s foreign exchange reserves to $14 billion by the end of July. Pakistan will receive formal documents on the deal later on Friday, Finance Minister Ishaq Dar told Reuters, which he said he would “sign, seal and return by tonight”.
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