Ishaq Dar departs for USA to attend World Bank and IMF annual meeting.
According to sources with knowledge of the situation, Ishaq Dar will formally ask senior IMF officials to change the macroeconomic framework for the current fiscal year 2022–23 by slowing GDP growth, rising inflation, and increasing the twin deficits of the budget deficit and current account deficit during meetings from October 10–16.
In order to offer some relief to those who are suffering from inflation, Islamabad is prepared to ask the IMF to loosen the terms of the Extended Fund Facility (EFF), particularly by freezing the fuel price adjustment of electricity and the petroleum development levy on POL products for the upcoming few months.
Pakistan will also ask for a relaxation of the budget deficit objective for the current fiscal year since heavy flooding could jeopardize its efforts to raise revenue and put more strain on its ability to control spending. According to the IMF program, the government has set a budget deficit target for the current fiscal year of 4.9% and is projecting a revenue surplus of Rs153 billion through the end of June 2023.
The IMF/World Bank’s annual meeting will be held in Washington, DC, from October 10 to October 16. Kazim Niaz, the secretary of the Economic Affairs Division, had already left Islamabad for Washington in order to attend the next BWI conference.
Economy of the current fiscal year
In the wake of devastating floods that have cost Pakistan’s faltering economy over $30 billion in reconstruction costs, a request to modify the macroeconomic framework will be made for the current fiscal year.
The administration has calculated that, in line with the macroeconomic framework, rather than the formerly anticipated objective of 5%, the country’s GDP growth may hover around 2% for the current fiscal year.
For the current fiscal year, the economic loss has been estimated at Rs2.4 trillion. According to estimates, nine to twelve million people will become poor due to the loss of 1.8 to 2 million jobs and a potential 4.5% to 5% increase in unemployment.
