ISLAMABAD: The International Monetary Fund (IMF) on Monday began discussions with Pakistan over its first quarterly review of the $6 billion 39-month economic programme, and at the same time has launched its ‘Regional Economic Outlook 2019’ on on Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region.
The visiting IMF mission had preliminary discussions on first quarter (July-September) data relating to revenue collection, its breakup and the reasons for shortfall of about Rs113 billion, reported Dawn.
The IMF mission raised questions over the revenue integration between federal and provincial tax systems and authorities. The mission said that a draft agreement for single return form and single revenue portal were shared with the provinces, according to the report.
The IMF report on the region says that the vicious cycle of low economic growth and rising public debt has limited Pakistan’s fiscal space for propelling growth rate.
However, Islamabad can reduce the accumulation of public debt by 4% of gross domestic product (GDP) by improving fiscal transparency, adopting a credible medium-term fiscal framework and public financing management system, according to the report.
The fund estimated the net lending to slightly reduce to 8.4 percent of GDP in 2020 when compared to 8.9 percent in 2019 and fiscal deficit declining to 7.4 percent of GDP in 2020 against 8.8 percent in 2019.
The total gross government debt, on the other hand, is also projected to increase from 76.7 percent in 2019 to 78.6 percent of GDP in 2020. The net government debt is also estimated to increase from 72.5 percent of GDP to 75.2 percent . Of this, the gross external debt is forecast to reach 43.7 percent of GDP in 2020 from 38.1 percent in 2019.
The fund stated that improving fiscal transparency, adopting credible medium-term fiscal frameworks and strengthening public finance management systems could help reduce the pace of public debt accumulation, helping MENAP oil importers to contain large debt.
