Pakistan's new budget crucial to secure IMF board review

KARACHI: Passing a budget for fiscal year 2023-24 that meets IMF program objectives is key to paving the way for a final review under the current bailout, the lender’s resident official for Pakistan said.

Pakistan stands to secure one board review under the current bailout package of the International Monetary Fund (IMF) if measures in its budget, set to be unveiled on Friday, meet the lender’s expectations, IMF’s resident representative for Pakistan, Esther Perez Ruiz said.

The IMF programme runs out this month with about $2.5 billion in funds, under three prior reviews, yet to be released, as Pakistan struggles to strike a deal with the lender while battling record inflation, fiscal imbalances and low reserves.

Passing a budget for fiscal year 2023-24 that meets program objectives is key to paving the way for a final review under the current bailout, Esther Perez Ruiz said.

“The focus of discussions over the FY2023-24 budget is to balance the need to strengthen debt sustainability prospects while creating space to increase social spending,” she told Reuters on Thursday.

More such spending would defray the impact of inflationary pressures on Pakistan’s most vulnerable, Ruiz added, but it needed more progress to identify spending and revenue-generating measures in order to achieve this.

Pakistan and the IMF have been engaged in budget talks.