Amid the shutdown strike observed by retailers across the country, the IMF has not yet placed Pakistan on the agenda list of its calendar till September 6, 2024, mainly because of non-confirmation on external financing.
The IMF Executive Board has issued its calendar details and Pakistan has not been placed on it due to nonfulfillment of external financing gap which the IMF staff conditioned for securing confirmation as a pre-requisite for approval from the Board at the time of striking the Staff Level Agreement on July 12, 2024.
On the other hand, the FBR is heading towards a massive shortfall in August 2024 and if the IMF programme is delayed beyond September 2024, then it might pave the way for more stringent conditions on account of shortfall on the fiscal side. Then Pakistan will be left with no other option but to rationalise expenditure as well as take additional revenue measures to satisfy the IMF. The policymakers should conclude the IMF programme approval within September 2024 otherwise more issues might surface. The mini budget in the first half cannot be ruled out if slippages on the fiscal front occur. The IMF has clearly illustrated in the draft MEFP that if there is an FBR shortfall of Rs60 billion in the first quarter against the assigned target of Rs2,652 billion, then additional revenue measures will have to be considered by the authorities. There is no easy path available on the IMF front, said the sources.
On the other hand, the government has so far refused to bow down against the pressures exerted by retailers but it might consider some more incentives for them on account of turnover of more than Rs10 million.
