IMF, Pakistan agree to provide targeted subsidies for food grains and energy

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IMF, Pakistan agree to provide targeted subsidies for food grains and energy
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IMF, Pakistan agree to provide targeted subsidies for food grains and energy

The pension bill is expected to increase from 801 billion rupees to 960 billion rupees next year: Photo: File

Islamabad: Pakistan’s economic team shared the macroeconomic framework with the IMF.

According to sources, the Ministry of Finance told the IMF in a briefing that there is a proposal to increase the tax target by 1300 billion rupees. FBR’s tax target for the new financial year is proposed to be set at 12,400 billion rupees, while differences between Pakistan and the IMF still remain on determining the basic economic targets.

Pakistan and IMF have also agreed to provide targeted subsidies for food grains and energy.

According to sources, the IMF has estimated GDP growth to be limited to 5.3 percent in the next fiscal year and the finance ministry has proposed a growth target of 7.3 percent next year. The IMF estimates inflation at 12.7 percent and the Finance Ministry at 11.8 percent.

The IMF has estimated the current account deficit at $4.6 billion, while the Pakistani authorities have proposed a current account deficit target of $4.2 billion.

A total income of more than 61 billion dollars is expected from exports and remittances. The target of domestic exports for the next financial year is proposed to be 7.32 billion dollars. The Ministry of Finance estimates imports at $58 billion and the IMF at $61 billion.

According to sources, the Ministry of Finance has proposed a remittance target of 30.6 billion dollars for the next financial year and the financial deficit for the next financial year has been estimated at 9600 billion rupees. It is proposed to allocate 1000 billion rupees for federal development projects in the next financial year.

The tax target of FBR is proposed to be 12 thousand 400 billion which is 1300 billion rupees more than this year. 9700 billion rupees will also be allocated for interest on loans. The pension bill is likely to increase from 801 billion to 960 billion next year.

According to the sources, in the IMF negotiations, it has been agreed to have a budget of 530 billion rupees for Benazirrankum Support Program.

IMF, Pakistan agree to provide targeted subsidies for food grains and energy