Pakistan Govt, IMF at odds over Rs900bn fiscal gap

ISLAMABAD: Amid the lingering stalemate over the fiscal gap, the International Monetary Fund (IMF) has worked out a larger gap of approximately Rs900 billion, equivalent to 1 percent of Gross Domestic Product (GDP). It is a major stumbling block in striking a staff level agreement.

However, Pakistani authorities have contested such a huge fiscal gap in achieving the primary deficit and asked the IMF for incorporating flow of reduction under the revised Circular Debt Management Plan (CDMP) and reduced amount of required additional subsidy of Rs605 billion against the earlier target of Rs687 billion.

Therefore, the fiscal gap stood in the range of Rs400 to Rs450 billion.

Top officials have completely ruled out any possibility of IMF condition about the signing of PTI Chairman Imran Khan for reviving the Fund programme and said that no such discussions took place with the IMF review mission.

“Differences still persist over ascertaining the exact fiscal gap between Pakistan and the visiting IMF review mission during the technical levels talks.

Once it’s finalised with the IMF, then the additional taxation measures will be firmed up, which will be unveiled through the upcoming mini-budget. Keeping in view this inability to reconcile the figure of fiscal gap, the technical level talks will continue on Monday and then policy level talks are expected to commence from Tuesday,” top official sources confirmed while talking to a select group of reporters in background discussions here on Saturday.

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