Preparations under way for talks with IMF team

ISLAMABAD: The Ministry of Finance has started preparations for holding the upcoming review talks with the IMF this week, and evaluated progress on key targets, including achieving disbursement of Rs87.5 billion cash transfers to beneficiaries under the BISP programme.

Under the quantitative performance criteria, the ceiling on the amount of government guarantees related target was envisaged at Rs4,000 billion but the Ministry of Finance restricted total guarantees at Rs3,853 billion till the end of September 2023. However, the external financing needs might become the most difficult issue for Pakistan during the upcoming review talks with the IMF.

The forex market functioning might also surface another bone of contention as the IMF it placed under structural benchmark for withdrawal of the circular on prioritisation in providing forex for certain types of imports introduced in December 2022, with the purpose of “ensuring full market determination of the exchange rate”.

The Ministry of Finance held its meeting to gauge progress on quantitative performance criteria, continuous performance criteria, indicative target, and structural benchmark conditions agreed with the IMF for the end of September 2023 under the $3 billion standby arrangement (SBA) programme. The IMF team is scheduled to arrive in Islamabad on November 2, 2023, and will stay here probably till November 16, 2023.

The government has also kept the circular debt of the power sector within the envisaged limits as it went up by Rs227 billion in the first quarter and touched Rs2.5 trillion by the end of September 2023. “The target of increasing circular debt has been achieved successfully which was agreed with the IMF under revised circular debt management plan (CDMP),” a top official confirmed to ‘The News’ on Monday.

Regarding cash transfer to the beneficiaries under the Benazir Income Support Programme (BISP), the official said that they so far disbursed Rs89 billion till the end of September 2023 against the envisaged target of Rs87.5 billion. The unconditional and conditional cash transfer remained well within the desired target, said the official.

The official said that the next installment would be disbursed under the BISP programme in November 2023, after which the cumulative disbursement under the BISP programme would touch Rs185 billion. The government has allocated a disbursement target of Rs460 billion for the BISP during the current fiscal year.

The State Bank of Pakistan (SBP) high-ups said that they were on track on the floor on net international reserves (NIR) of the SBP that would be standing at negative $14.5 billion till the end of September 2023.

The ceiling on net government budgetary borrowing from the SBP stood at Rs4,078 billion for the end of September 2023 as the government’s borrowing from the central bank remained zero.

The indicative target of FBR’s collection has been achieved as the floor on net tax revenues collected by the FBR was envisaged at Rs1,977 billion till the end of September 2023. The ceiling on net accumulation of tax refund arrears stood at Rs32 billion.