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ISLAMABAD: Technical talks are underway between Pakistan and the International Monetary Fund (IMF) to finalize the project and the salient features of the next budget for 2020-21 in a post-COVID-19 pandemic situation, News reported Saturday.
Senior officials said the IMF has also linked the resumption of the Extended Fund (EFF) program with the approval of the next budget for 2020-21 in compliance with a broader framework in which both parties will agree as a result of ongoing technical talks. .
Technical talks are underway through virtual engagements with the Washington, DC-based IMF team.
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IMF estimates that Pakistan requires $ 29 billion in external financing
The IMF has estimated that Pakistan requires gross external financing of $ 29.3 billion in the next budget against $ 25 billion for the outgoing fiscal year 2019-20.
He indicates that Islamabad will have to increase its dependence on external indebtedness to meet its financing requirements in case the country is still unable to attract non-debt inflows of dollars.
The direction of the next budget will have to be aligned with the structural reforms foreseen in the $ 6 billion EFF program.
The IMF has agreed with Pakistan to review all macroeconomic and fiscal frameworks in the post-COVID-19 situation, so the reactivation of the EFF requires a broader agreement in light of emerging realities.
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‘Conversations aimed at the evolution of consensus’
The completion of a second review under EFF and the release of a third tranche worth $ 450 million will be finalized once the budget is approved by the National Assembly in late June 2020. It has not yet been decided whether the second and third reviews They will be clubbed or approved by the Executive Board of the Fund separately.
“The talks at the technical level have already started,” said a senior Finance Division official, explaining that these technical talks could only turn into review talks when the budget was approved by Parliament.
The official said the technical talks were aimed at developing a consensus on the macroeconomic and fiscal framework where some numbers were quite crucial.
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These included the budget deficit, the primary deficit, the FBR revenue-raising target and the main spending heads, as well as structural reforms related to central bank autonomy.
The IMF has granted the FBR tax collection target of Rs 5,101 million for the next budget against the revised target of Rs 3,908 million for the outgoing fiscal year, indicating that it requires growth of approximately 31% to realize its objective. wanted.
Originally published in
News
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