Pakistan has held a high-level virtual meeting with the International Monetary Fund (IMF) in a final bid to receive a $1.2 billion tranche.
Finance Minister Ishaq Dar and IMF Mission Chief Nathan Porter on Tuesday had their first virtual meeting to discuss the pending bailout program for Pakistan, five days after the federal government presented the fiscal year budget 2023-24 on Friday.
This comes after Monday when the authorities successfully paid off a Chinese commercial loan of $1 billion, bringing the overall official currency reserves below $3 billion, according to Express Tribune.
According to finance ministry sources, the first virtual contact resulted in no big breakthroughs, and another round of discussions will now be held to address IMF concerns.
The IMF questioned the sustainability of the new budget features, notably non-tax receipts. It also raised concerns regarding the Federal Board of Revenue’s (FBR) tax collection target of roughly Rs. 9.2 trillion for the upcoming fiscal year.
There were also questions regarding the reliability of the Rs7.3 trillion budgeted for interest payments in the coming fiscal year.
The IMF team inquired about power subsidies and asked for meetings with the Power Division, including a separate meeting with the FBR.
Dar departed the premises shortly after the meeting with the IMF without commenting on the outcome.
Only 17 days remain till the IMF’s extended program expires, and the government has made one final attempt to acquire $1.2 billion from the remaining $2.6 billion in loans. The entire cost of the program is $6.5 billion, with $3.9 billion already dealt with.
A participant in the virtual huddle expressed hope that the IMF would agree to release a $1.2 billion tranche if the FBR, Finance Ministry, and Power Division successfully convince the lender.
Regarding the above-mentioned commercial loan payment of $1 billion to China, sources at the State Bank of Pakistan (SBP) and the Finance Ministry said the amount was paid in full to China Development Bank (CDB) on Monday.
They said while the loan was maturing on June 29, the federal government decided to pay it now in order to get it rolled over before the fiscal year ended on June 30.
The payment to CDB was also made to attract more foreign investments from other sources. As part of these efforts, the government has also exempted the disclosure of source of income for up to $100,000 remitted by overseas Pakistanis in the upcoming fiscal.
It bears mentioning that Pakistan is also set to pay back $300 million to the Bank of China in less than two weeks.
