Pakistan hopes to reach a staff-level agreement on a more than $6 billion bailout from the International Monetary Fund this month after meeting all of the lender’s requirements in its annual budget, according to its junior finance minister.
“We hope to wrap up this (IMF) process in the next three to four weeks,” Minister of State for Finance, Revenue, and Power Ali Pervaiz Malik said on Wednesday, with the goal of reaching a staff-level agreement before the IMF board recess.
“I think it will be north of $6 billion,” he said of the package’s size, though he stressed that at this moment, the IMF’s approval remained the key issue.
The South Asian government has set lofty revenue targets in its yearly budget to help it secure IMF approval for a loan to avoid another economic downturn, even as domestic discontent grows over new taxation measures.
The IMF did not immediately respond to a request for comment. Pakistan has set a tax collection target of 13 trillion rupees ($47 billion) for the fiscal year beginning July 1, a nearly 40 percent increase over the previous year, and a substantial decline in its budget deficit to 5.9 percent of GDP from 7.4 percent the previous year.
Malik stated that the goal of presenting a severe and unpopular budget was to utilize it as a stepping stone for an IMF program and that the lender was satisfied with the revenue measures implemented based on their discussions.
“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” Malik said to reporters.
“Obviously they (budget reforms) are burdensome for the local economy but the IMF program is all about stabilization,” Malik said to the crowd.
Pakistan’s benchmark share index increased by 1% in trade on Wednesday, reaching a record intraday high of 80,348 points at 0640 GMT.
