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Meeting with IMF from 26th in Dubai

September 23, 2012

ISLAMABAD, Sept 22: The three-day technical level talks between Pakistan and the IMF are scheduled in Dubai from September 26 while policy level talks with IMF mission is scheduled to be held in Islamabad in the first week of October.

The Post Programme Monitoring consultation is held to discuss the loans repayments as Pakistan has borrowed over and above its quota limit from the IMF, however, officials have denied that the consultation with IMF is to discuss any fresh loan programme with the donor agency.

Special Secretary Finance and Adviser to Ministry of Finance Rana Assad Amin has said that said the Post Programme Monitoring are technical level talks that include review of the economic situation of last fiscal year, forecast for short term and medium term, initiatives undertaken in the budget and other administrative measures leading to increased revenue generation for the country.

“The improvement in revenue would be a source of satisfaction for Fund authorities as it would reflect country’s capacity for repayment of IMF loan as per the agreed schedule,” said Amin.

He expressed confidence that overseas Pakistanis will steer the economy out of the challenges through their remittances which are expected to reach $17 billion during 2012-13.

The officials believe that budget deficit would be maintained at 4.7 per cent of GDP, as revenue collection is expected to reach its target of Rs2.38 trillion, while expenditure is expected to be on the lower side.

“I totally dispel the impression being created that Pakistan’s budget deficit is going to touch 11 percent of the GDP in current fiscal year,” the Special Secretary said.

The Ministry of Finance has projected revenue collection target at Rs475 billion for the period (July-September 2012), which is around 20 percent of the total target for 2012-13.

The special secretary said that during the first two months, expenditure totalled 0.8 percent of GDP against an expenditure of 1.1 percent of the GDP during the same period last year.

Mr Amin expressed confidence that the challenging federal tax collection target of Rs.2.38 trillion for 2012-13 would be achieved by the FBR.

However, he suggested that it would be better for FBR Chairman, to bifurcate the collection responsibilities, at Rs2.3 trillion by federal government and remaining Rs81 billion by Punjab and Sindh as they have projected collection targets at Rs70 billion Rs.30 billion respectively from GST on services.

However a major expenditure faced by the government remains to be the power sector subsidy, which totalled Rs72 billion in the past two and a half months.

Regarding other inflows he explained that in federal budget it has been anticipated that Pakistan will receive $800 million from auction of 3-G spectrum, $800 million from Etisalat as PTCL privatization proceeds and $400 million as Coalition Support Fund (CSF) from United States.

“Even if these are not materialized completely, Pakistan would be in a position to repay IMF loan with dignity according to the schedule agreed with the Fund authorities as country’s foreign exchange reserves are $15 billion and after repayment of $2.9 billion in the ongoing fiscal year there would be no threat of balance of payment crisis in Pakistan.” Amin said.