Minister of State for Finance Aisha Ghaus Pasha told the National Assembly Standing Committee on Finance on Thursday that the agreement on the 9th review has been pushed back because the International Monetary Fund (IMF) has refused to reduce the external financing requirement to $3 billion.
Pasha said there is no Plan B and the government is still committed to the IMF program. She mentioned that the Fund had been initially requested to lower its $6 billion external financing requirement for Pakistan since the current account deficit had been substantially reduced, but the lender refused.
The IMF was informed that the government had arranged $4-4.5 billion including $2 billion from Saudi Arabia, $1 billion from the UAE, $450 million from the World Bank, and $250 million from the Asian Infrastructure Investment Bank. However, the Fund refused to agree to reduce the external finance needs, which Pasha claimed has been the key cause for the delay in the staff-level agreement (SLA).
According to the state minister, the IMF now requires budget figures from the 10th review, which the government is sharing. She said the IMF is the only option and there was no Plan B under consideration. The minister stated that the government is committed to the IMF agenda and that the prime minister and the IMF MD agreed that it is critical to complete the existing program.
More on budget, Pasha remarked that the Finance Ministry is obligated under the Financial Management Act to provide the budget strategy paper to the committee, The prime minister has formed eight committees to give proposals on various sectors. Pasha stated that after these recommendations are implemented and the budget strategy paper is finalized, it would be shared with the NA committee before the full budget presentation.
The state minister lamented that the budget document should have been posted on the Finance Ministry’s website on April 15th. On another pressing note, Pasha informed the committee that Finance Minister Ishaq Dar was unable to participate in the committee sessions because he was preoccupied with prevalent political and economic issues.