June 15 (Reuters) – The International Monetary Fund (IMF) on Thursday expressed dissatisfaction with Pakistan’s recently presented budget, a blow for the cash-strapped country which has only two weeks left until its bailout programme expires.
Pakistan has barely enough currency reserves to cover one month's imports. It had hoped to have $1.1 billion of the funds released in November – but the IMF has insisted on a number of conditions before it makes any more disbursements.
With time for only one last IMF board review before the end of the $6.5 billion Extended Fund Facility (EFF), Pakistan was expected to present a budget in line with programme objectives, restore the proper functioning of the FX market, and close the $6 billion gap ahead of the board review.
"Staff remains engaged to discuss policies to maintain stability. However, the draft FY24 Budget misses an opportunity to broaden the tax base in a more progressive way," Esther Perez Ruiz, the IMF's resident representative for Pakistan, said in a text message to Reuters.
She added that the long list of new tax expenditures further reduces the fairness of the tax system and undercuts the resources needed for vulnerable recipients in the Benazir Income Support Programme.
"The new tax amnesty runs against program’s conditionality and governance agenda and creates a damaging precedent," added Perez Ruiz.
She said that measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy.
Added Perez Ruiz: "The IMF team stands ready to work with the government in refining this Budget ahead of its passage," implying the country still has a chance to unlock its ninth IMF board review prior to the end of the EFF programme.
A Pakistan government spokesman did not immediately respond to a request for comment.
Our Standards: The Thomson Reuters Trust Principles.
Thomson Reuters
Ariba Shahid is a journalist based in Karachi, Pakistan. She primarily covers economic and financial news from Pakistan, along with Karachi-centric stories. Ariba has previously worked at DealStreetAsia and Profit Magazine.
The killing of a teenager by a police officer this week has revived long-standing questions about the state of the French police and the inability of consecutive governments to reform an institution bound by powerful unions.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2023 Reuters. All rights reserved

source