Pakistan-IMF meeting today

Friday July 03, 2009

ISLAMABAD: The International Monetary Fund (IMF) has requested Pakistani authorities to provide statistics with respect to interest and amortisation payments of major public enterprises, budgetary expenditures, including subsidies, grants, net lending and earthquake-related spending, official sources reported.

The IMF is to review performance of Pakistan's economy from July 3, as scheduled under the 7.6 billion-dollar standby arrangement, for which a team of the Finance Ministry, led by Finance Secretary Salman Siddique will face the Fund's panel in Istanbul, Turkey. The sources said the Pakistani team had been requested to provide details of Federal Board Revenue (FBR) revenue data for June 2009, including a two-year time series with a breakdown of direct taxes into its components.

Major revisions to the taxes, announced on June 13 in the budget, were revised downward a mere five days later, which are estimated to reduce the government revenue by Rs 22 billion. In addition, the government announced a rise in pay and pensions from 15 percent (as announced on June 13) to 20 percent as announced five says later.

The only reduction, announced by the State Minister for Finance and Economic Affairs, was Rs 183 million in the annual allocation for National Accountability Bureau (NAB). The consequent rise in the budget deficit was not noted by the government. It is a foregone conclusion that this raised serious concern within the IMF team dealing with the Pakistan authorities.

Budgetary revenues for all categories, including all non-FBR collected revenue, ie carbon tax and non-tax revenues and external budgetary financing with a detailed breakdown as well as domestic bank and non-bank financing and public debt, will be provided to the IMF team and will be an integral component of the discussions.

The sources said the IMF had also asked the Finance Ministry to provide detailed breakdown of the sub-category of current spending labelled "running of the civil government", separating in particular the wage bill and goods and services, for the FY 2005-06, FY 2006-07 and FY 2007-08, the first three quarters of the FY 2008-09 (actual execution data).

(BRecorder)