Islamabad, 24 June, 2023 (GNP): The government of Pakistan and the International Monetary Fund (IMF) reduced their differences after the government agreed to make adjustments to the budget and also withdrew import restrictions.
According to the sources, Pakistan already conveyed to the officials of the IMF that the government is ready to make changes in the budget as well as in taxation sides.
The adjustment was equal to approximately 0.3% of the gross domestic product (GDP) but it was a gap of about half of what the IMF had identified.
Moreover, the government proposed to cut down expenses by Rs200 billion and introduced new taxes of Rs100 billion, the sources said.
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The government has high expectations to strike a deal with the IMF soon as the round of talks went smoothly. The sources said that things were moving ahead in a positive direction since Thursday. Nevertheless, there was no official announcement yet.
The discussions between the two sides continued until late at night after the IMF called for further adjustments. As per the expected size of the economy for the next fiscal year, Pakistan planned to offer about Rs300 billion. However, there is no confirmation of the accurate amount.
On condition of anonymity, a senior government official stated that Pakistan has reached halfway and now the IMF should step forward to cover the distance.
A day earlier, the prime minister emphasized that the government is fully committed to fulfilling the terms of the IMF agreement and that all prior actions for the 9th review of the Extended Fund Facility (EFF) had been completed.
Prime Minister Shehbaz Sharif said that he had a productive exchange of views with Kristalina Georgieva on IMF's continued engagement with Pakistan. Pakistan keenly looks forward to IMF board's approval for the 9th Review and is taking steps to jointly work with IMF. pic.twitter.com/IGUln1HouM
— Government of Pakistan (@GovtofPakistan) June 23, 2023
Moreover, The State Bank of Pakistan (SBP) made a significant move on Friday by withdrawing a warning it had issued to banks six months prior about restricting imports.
Pakistan’s current account deficit significantly decreased to $2.9 billion over the first 11 months of this fiscal year as a result of administrative restrictions imposed on imports.
