Pakistan’s finance minister said on Saturday that the International Monetary Fund (IMF) had expressed concern over the country’s recently unveiled budget, but the government is confident it can make changes to satisfy the lender.
Pakistan is seeking a staff-level deal with the IMF this month, Miftah Ismail said.
He on Friday unveiled a 9.5 trillion Pakistani rupees ($47.12 billion) budget for 2022-23 aimed at tough fiscal consolidation in a bid to convince the IMF to restart much-needed bailout payments.
“There are still concerns in the IMF about our budget and numbers and things like that,” Ismail said in an interview at his office in Islamabad.
He said the IMF was concerned about fuel subsidies, the widening current account deficit and the need to raise direct taxes further.
Fuel subsidies have been reduced over the past two weeks and the remaining support is expected to be phased out in the coming days.
The proposed budget estimates also aim to bring the current account deficit under control, but direct tax revenue remains a concern and Ismail said “slight differences” remain.
The IMF resident representative in Islamabad did not immediately respond to a request for comment.
Ismail said Pakistan would seek to allay concerns before the budget is passed by parliament. Pakistan’s fiscal year runs from July 1 to June 30.
“If there are changes we need to make to incorporate them, we will,” he said.
Pakistan is midway through a 39-month, $6 billion IMF program that has stalled due to concerns by the lender over the status of some of its targets, including fiscal consolidation.
Pakistan urgently needs funds in the face of dwindling foreign exchange reserves, which have reached $9.2 billion – enough for less than 45 days of imports.
($1 = 201.6000 Pakistani rupees)