ISLAMABAD: While the country is going to face an uncertain political situation following the planned march by a political party towards Islamabad, a mission of the International Monetary Fund (IMF) is visiting Pakistan to review and evaluate the country’s performance on implementation of the loan program — the $6 billion extended fund facility (EFF) given to the country.
The IMF mission will review the performance before releasing the next tranche of approximately $460 million.
According to insiders, though the IMF mission was reluctant to visit Pakistan as per the scheduled date due to Jamiat Ulema-e-Islam’s (JUI-F) decision to hold rallies against the government and a possible sit-in in Islamabad, the Ministry of Finance has reportedly assured the mission that the activities at secretariat would not be disturbed.
Following the assurance on the part of the government, the mission is visiting Pakistan, the sources said.
According to sources, the mission will review Pakistan’s performance against six performance criteria related to Net International Reserves (NIR), Net Domestic Assets (NDA), net foreign currency swap position, primary budget deficit target, net government borrowing from the central bank and stock of sovereign guarantees issued by the government.
Initially, members of the mission and officials of the finance ministry and concerned departments will exchange figures and data for evaluation. According to sources, IMF officials will hold a meeting with Advisor to the Prime Minister on Finance Abdul Hafeez Sheikh on Tuesday. The mission will also hold meetings with Federal Bureau of Revenue (FBR) Chairman Shabbar Zaidi.
After staying for two weeks, the IMF staff will circulate its staff report among the board members and later the IMF’s executive board will take a decision on the release of the second tranche.
According to the signed agreement in July this year, Pakistan will get $2 billion annually, under the EFF, for a period of three years. The amount is supposed to help Pakistan stabilise its crippling state of economy and recover from fiscal debt and inflation.
During the review for July-September quarterly targets, the finance division may face queries about the missed targets especially the revenue side. FBR could not meet the IMF conditions of collecting Rs1.071 trillion tax revenues with the collection of only Rs963 billion. The FBR missed its first-quarter tax collection target by Rs108 billion and issued only Rs30 billion tax refunds and the power division failed to restrict the addition in circular debt by only Rs23 billion.
Pakistan, as per the IMF program, has also missed the target of institutional reforms besides reducing losses of public sector entities. According to sources, there could be issues in explaining to the IMF the reasons behind missing the first quarter target and the prospects to achieve the second quarter (October-December) target of Rs1.295 trillion.