No deal yet with IMF for revival of loan programme.

ISLAMABAD -- Pakistan and the International Monetary Fund (IMF) have not yet been able to reach close to a staff-level agreement for revival of the Extended Fund Facility (EFF), leaving authorities in a tight spot to bridge the gap and get the updated federal budget for the fiscal year 2022-23 passed by the National Assembly.

The authorities in the finance ministry were expecting to conclude the staff-level agreement by Sunday (June 19) on the basis of revenue and expenditure measures that could deliver next year's primary budget (the difference between revenues and expenditures, excluding interest payment) in Rs152 billion surplus.

However, the IMF staff still has reservations over Rs9.5 trillion expenditures projected by the authorities for the next fiscal year. The revenue measures in the budget, according to IMF estimates, are also insufficient to deliver slightly over Rs7tr target.

Read: Up the IMF creek

A top finance ministry official confirmed on Sunday night that they had not yet received the first draft of memorandum of economic and financial policies (MEFP) from the IMF as targeted earlier because certain matters remained unsettled. 'We are working very closely with the IMF and will soon reach some conclusion,' the official said.

The government is targeting to secure the passage of the budget 2022-23 from the National Assembly on June 27-28, according to the finance ministry's schedule of events. For this to happen, it has to reach an agreement with the IMF so that the agreed measures could be protected in the budget. In any case, the budget has to be passed by parliament by 28 to legally ensure its implementation with effect from July 1, as required under the Constitution.

While the two sides remained divided over personal income tax slabs and rates, the federal authorities received another setback after the provinces came up with their budgets which created another shortfall of almost one per cent of gross domestic product (GDP) - apparently meaning that the primary account would be in a massive deficit - rather than Rs152bn surplus.

The federal government had projected Rs800bn cash surplus from the four provinces in the budget for next fiscal year. However, so far only the Punjab government announced a budget with Rs125bn surplus, while Sindh presented a Rs35bn deficit budget. Khyber Pakhtunkhwa has neither committed a surplus nor projected a deficit in its budget. Balochistan has not yet announced its budget, but is highly...

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