The International Monetary Fund (IMF) has said that that the data on the guarantees by the Government of Pakistan dating back to the fiscal year (FY) 2016 had been inaccurately reported.
This announcement by the IMF accompanied another statement regarding the approval of $500 million to Pakistan after the second to fifth review under the Extended Fund Facility (EFF) program. The IMF has uploaded two press releases dated 24 March in this regard on its website.
The statement on the inaccurate data detailed that the revised data indicates non-observance of the performance criteria on the government guarantees at end-September 2019 by a margin of Rs. 357 billion (about 0.9 percent of the GDP).
The IMF said that this had resulted in a non-complying purchase and a breach of obligations under Article VIII, Section 5 of the IMF Articles of Agreement. Previously, at the time of the filing of this data, the authorities had said that the performance criteria had been met with a margin of Rs. 55 billion (0.1 percent of the GDP) at the end-September 2019.
However, the IMF had also noted that the Pakistani authorities had taken strong corrective actions to address the institutional and technical shortcomings that result in the inaccurate reporting of information.
The measures highlighted by the IMF in this regard are creating a working group to reconcile and cross-check guarantees and debt data, announcing additional functions for the Debt Policy Coordination Office (DPCO) including acting as the custodian of all the guarantees issued by the federal government and publishing a semi-annual debt bulletin that consolidates key debt statistics.
Beyond these actions, the authorities are also committed to including a list of all the new guarantees expected to be issued in the FY 2022 budget submitted to Parliament.
The Deputy Managing Director and Acting Chair of the IMF, Antoinette Sayeh, said, “The non-complying purchase arose as a result of a lack of inter-agency coordination in the compilation of government guarantees provided by the federal government to state-owned enterprises that contributed to incorrect estimates of government guarantees starting as far back as the fiscal year 2016”.
She added that keeping in view Pakistan’s strong and proactive commitment to providing timely and accurate data to the IMF in the future, the Executive Board has decided that it does not require further remedial action in connection with the breach of obligations.
The IMF stated that the Pakistani authorities have continued to make satisfactory progress under its supported program which has been an important policy anchor during an unprecedented period.