IMF estimates Pak budget deficit to decline to 6.8pc of GDP. ISLAMABAD - The International Monetary Fund (IMF) on Wednesday expressed the hope that the staff level agreement with Pakistan will be signed soon followed by the IMF Board’s approval. Jihad Azour, Director, IMF for Middle East and Central Asia Department (MCD), hoped that Pakistan would continue towards its progress on the reforms in various sectors and complete the IMF Programme in time and IMF will play its positive role in bringing economic stability in Pakistan. Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar attended IMF/World Bank Spring meetings through zoom from Islamabad with high level IMF team headed by Mr. Jihad Azour, Director Middle East and Central Asia Department (MCD).
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Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha, SAPM on Finance Tariq Bajwa, and SAPM on Revenue Tariq Mehmood Pasha attended the meeting virtually from Islamabad. Whereas Ambassador of Pakistan to the USA Masood Ahmad Khan, Governor SBP Jamil Ahmad, and Secretary Finance, Secretary EAD attended in person. The two sides discussed the progress made with the ongoing IMF program, particularly the talks held with the IMF Mission during their visit to Pakistan and implementation of prior actions. During the meeting, Ishaq Dar apprised the IMF team about the economic challenges being faced by the country. He further shared the government’s vision for bringing about macroeconomic stability in the country. He also informed that all prior actions for 9th Review under the Extended Fund Facility have already been completed and Government of Pakistan is fully committed to fulfil its obligations as agreed with the IMF. He mentioned that the only IMF Program completed successfully was under his previous tenure as Finance Minister.
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The Finance Minister thanked Director Jihad Azour and his IMF team for support extended in completing 9th Review. Meanwhile, the International Monetary Fund (IMF) has estimated that Pakistan’s budget deficit would decline to 6.8 percent of the Gross Domestic Product (GDP) in the current fiscal year (FY23). The IMF in its report, ‘Fiscal Monitor on the path to policy normalization’ has noted that Pakistan’s budget deficit was 7.8 percent of the GDP in the last fiscal year FY22, which would be reduced to 6.8 percent of the GDP in ongoing fiscal year. It further estimated that budget deficit would jump to 8.3 percent in the next financial year FY24. Meanwhile, the primary deficit — the difference between government revenues and spending, excluding interest payments — has estimated at 0.5 percent of the GDP in the FY23 that was 3 percent of the GDP in FY22. It would further improve to 0.4 percent in the upcoming year.
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The IMF has projected that Pakistan’s revenue would improve to 12.2 percent of the GDP in FY23 from 12.1 percent of the GDP in FY22. Meanwhile, the government’s expenditures would reduce to 19.1 percent of the GDP in FY23 from 19.9 percent of the previous year. However, the expenditures would increase to 20.8 percent in the next fiscal year. According to the report, government gross debt would reduce to 73.6 percent in FY23 from 75.8 percent of the previous year. It would further reduce to 68.9 percent of the GDP in next fiscal year. The general government net debt would reduce to 68.7 percent of GDP from 69.5 percent of the GDP of the previous year. It would reduce to 65 percent of the GDP in next fiscal year. On Tuesday last, the International Monetary Fund (IMF) had projected lower GDP growth for Pakistan only at 0.5 percent for the current fiscal year. The IMF in its latest report, “World Economic Outlook (WEO): A rocky recovery” has projected that Pakistan’s growth rate would decline, inflation and unemployment rates would increase and current account deficit would narrow in the ongoing financial year. The Fund has estimated that Pakistan’s growth would decline to 0.5 percent in FY23 from 6 percent in the last fiscal year FY22.
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