Ahead of crucial talks, IMF spots Rs2tr breach in Pakistan's budgetary estimates.

ISLAMABAD -- In its initial assessment ahead of the long-delayed in-person parleys, the International Monetary Fund (IMF) identified a breach worth Rs2 trillion (or over Rs2,000 billion) in budgetary estimates for the fiscal year 2022-23, warning that the primary and budget deficits could escalate with a massive margin, media reported on Saturday.

Pakistan and the IMF high-ups are scheduled to kick-start parleys from Tuesday (January 31) for accomplishing the ninth review under the Extended Fund Facility during which the fiscal slippages and reconciliation of figures will be the major topic of discussion.

The government had envisaged a budget deficit target of 4.9% of the gross domestic product (GDP) and a primary deficit to keep it at positive 0.2% of the GDP on the eve of the budget announcement for 2022-23.

According to sources, the IMF is currently asking Pakistani authorities to take additional taxation measures worth Rs600 billion through a mini-budget.

The sources told media that Pakistani authorities did not agree to it at all and argued that the primary deficit would not escalate up to such an extent at all.

It should be noted that now there are listed areas where both sides have divergent views and will have to sort out the differences to move towards striking a staff-level agreement by February 9.

The senior officials of the IMF have also taken the decision that they will incorporate a hike in circular debt of Pakistan's cash-bleeding energy sector beyond the agreed limit with the lender of the last resort as part of the primary deficit for the current fiscal year 2022-23.

It should be noted that the primary...

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