Mini budget on cards over harsh conditions by the IMF
ISLAMABAD: Mini budget on cards over harsh conditions by the International Monetary Fund.
After revising downward the FBR’s target from Rs5.5 trillion to Rs5.238 trillion, Pakistan has agreed under the new structural benchmark condition with the IMF to take ‘additional measures’ on the eve of presenting the budget review before parliament by end of February 2020.
This indicates that a mini-budget is on the cards if the need arises to achieve the envisaged annual targets for the current fiscal year under the IMF program.
On the other side, the non-tax revenue target has also been jacked up by 0.8 percent of GDP to compensate the shortfall on front of FBR tax collection and keeping the budget deficit, especially the primary deficit, within the desired limits.
“On the basis of the review’s findings, we will implement ‘additional measures’ as needed to ensure that FY 2020 annual targets are observed,” the Memorandum of Economic and Financial Policies (MEFP) dully signed by Adviser to the PM on Finance Dr Abdul Hafeez Shaikh and Governor SBP Dr Reza Baqir stated under the IMF’s $6 billion Extended Fund Facility (EFF).
According to MEFP document, in line with the recently enacted Public Financial Management (PFM) Act, “we initiated the required analytical work and data gathering for the timely preparation of (i) a mid-year budget review and (ii) a strategy paper by March 15, 2020.