Pakistan to get IMF loan's second tranche by end of this year

ISLAMABAD: International Monetary Fund’s (IMF) first assessment of Pakistan’s economic progress ends on a positive note, Pakistan to get second tranche of approved loan in December, ARY News reported on Friday.

The second tranche of IMF loan designated for Pakistan, worth 450 million rupees will approximately be delivered to the country by the end of this year.

The IMF delegation held elaborated dialogues with Pakistan officials over the economic situation of the country, whereas, the IMF mission will respond to the government over reviewing its financial targets of grabbing Rs5500 billion tax collection in the current fiscal year, sources said.

It is noteworthy to mention here that Pakistan has demanded to deal with the Financial Action Task Force (FATF) matters separately from the IMF bailout package. The federal government has also sought the elimination of the condition for guaranteeing the financial body for the issuance of bonds.

Read: ‘Govt moving in right direction’: IMF hails economic outcomes

IMF mission during its talks with the economic officials stressed on the issuance of funds allocated for the development programs, as well as the establishment of a tax collection authority, sources said.

Prior to the development, the international body emphasised to further reduce the fiscal deficit by making a cut in government’s expenses, exemption and subsidies in different sectors and a major rise in the number of taxpayers and.

During the stay of the IMF mission in Pakistan, the economic team briefed the institution over the financial statistics which witnessed a reduction of 32 percent in term of current account deficit; 64 pc declivity in the first quarter of the current financial year and 50 pc decrement in the fiscal deficit.

Read: IMF hails Pakistan’s economic reforms, assures continued support

The overall figure of the fiscal deficit was shrunk to 0.7 percent from 1.5 percent, whereas, a sharp rise in tax return filing up to 55 percent while the authorities recorded a 15 percent rise in tax collections.

A phase-wise reduction was made in circulatory debt of Rs1200 billion, sources added.

Both sides have also held discussions over the financial targets to be finalized for the next quarter. The government had been given a target for tax retrieval up to Rs1447 billion in the first four months of the current fiscal year, however, the collections stood at less than Rs167 billion from July to October.

Sources said that the IMF mission will depart from Pakistan after completing its visit on Thursday or Friday (tomorrow).

Read: Financial adjustment needed in Pakistan’s economy: IMF

Pakistan will be issued the next tranche of the IMF loan which is likely to be dispatched in 2020 that would worth $1.44 billion after the exchange of economic data with the financial body during technical dialogues.

It may be noted here that Pakistan had received $1 billion from the International Monetary Fund (IMF) as the first tranche of a bailout package for balance of payment support on July 10.