IMF unveils wish-list for economic crisis-hit PakistanMarch 12th, 2011 - 2:52 pm ICT by ANI
Islamabad, Mar 12(ANI): The International Monetary Fund (IMF) has expressed its concerns over rising debt, higher government borrowing and quasi-fiscal operations (subsidies) in Pakistan, and unveiled a ‘wish-list’ that Pakistani authorities must adhered to during the remaining period of the current fiscal year.
The 11-day inconclusive talks between the Pakistan government and an IMF mission, which ended on Friday, witnessed a lot of ups and downs, the Dawn reports.
Both sides finalised monthly benchmarks for deficit control, tax measures and other policy decisions for possible review in May.
The government would inform the IMF about its final plan for introducing Flood Tax and an increase in Special Excise Duty over the next couple of days because of a ‘multiple approval process’, a government official said. The legislation to introduce these two taxes has already been submitted to the parliament for approval.
The two sides also discussed the next year’s budget, and the IMF insisted on the introduction of Reformed General Sales Tax (RGST) with effect from next year to provide a sustainable basis for the year’s fiscal framework.
After the talks, IMF mission head Adnan Mazarei said in a statement: “Discussions on economic stabilisation focused on addressing inflation, containing the budget deficit, reviving growth, and meeting the challenge posed by higher international oil prices. There was agreement on the need to reduce the budget deficit in the current financial year.”
“The mission welcomed the recent expenditure restraint and tax policy and enforcement measures being considered by the government to mobilise additional revenue,” said Mazarei, adding that the mission expected prompt implementation of tax measures to help improve the budgetary position.
“Looking ahead, significant fiscal consolidation will be needed in 2011/12 in order to reduce inflation and ensure debt sustainability. The lower budget deficit would also help manage the impact of higher oil prices on the economy,” the IMF statement concluded. (ANI)
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Tags: budget deficit, current fiscal year, debt sustainability, enforcement measures, excise duty, fiscal consolidation, fiscal framework, fiscal operations, imf mission, inconclusive talks, international monetary fund, international monetary fund imf, international oil prices, pakistan government, pakistan islamabad, pakistani authorities, policy decisions, sustainable basis, tax measures, ups and downs