Pakistan’s Fiscal Year Budget
The successful passage of Pakistan’s budget for the fiscal year 2023-24, aligning with the objectives of the International Monetary Fund (IMF) program, is essential for progressing towards the final review under the current bailout, stated Esther Perez Ruiz, the IMF’s resident representative for Pakistan.
To secure one board review within the existing IMF bailout package, Pakistan must meet the lender’s expectations, which will be determined by the budget to be unveiled on Friday. As the IMF program approaches its conclusion this month, approximately $2.5 billion in funds from three prior reviews remains unreleased. Pakistan’s struggle to reach an agreement with the lender continues amid challenges such as record inflation, fiscal imbalances, and low reserves.
The key to unlocking the final review lies in passing a budget that effectively fulfills the program’s objectives for the Pakistan’s fiscal year 2023-24, according to Esther Perez Ruiz. In an interview with Reuters, she emphasized the focus of discussions on balancing the enhancement of debt sustainability prospects with creating room for increased social spending. Such spending would alleviate the impact of inflation on Pakistan’s most vulnerable population. However, further progress is needed to identify measures that generate revenue and allocate spending accordingly to achieve these objectives.
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Pakistan and the IMF have been actively engaged in budget talks as they work towards a mutually beneficial agreement. The successful implementation of the budget in line with IMF program goals will play a crucial role in determining the country’s financial stability and economic prospects in the coming year.
