Islamabad, November 7, 2024-The International Monetary Fund (IMF) will dispatch an emergency team to Pakistan next week to address deviations in Pakistan’s economic performance and discuss possible fiscal adjustments, including a mini-budget. The visit, scheduled for November 11-15, follows concerns over unmet performance targets, media reported on Thursday.
An IMF source clarified that this mission is separate from the formal review under the Extended Fund Facility (EFF), set for the first quarter of 2025. The decision for an in-person visit came after Pakistani authorities were unable to assure IMF officials of their fiscal intentions in recent virtual meetings.
Fiscal data for July-September shows mixed results. Non-tax revenue, particularly from the State Bank of Pakistan (SBP), produced a quarterly surplus for the first time in 20 years. However, tax revenue fell short, with the Federal Board of Revenue (FBR) reporting a Rs189 billion shortfall, with projections of a Rs321 billion shortfall by year-end. Large-Scale Manufacturing growth lagged at 1.3%, below the 3% target, though inflation eased and imports declined.
To address these fiscal challenges, Pakistan could further reduce development spending within the Public Sector Development Program (PSDP), where only Rs22 billion of the allocated Rs1,100 billion for FY2024-25 was utilized in the first quarter.
