KARACHI – Pakistan has requested in writing that the International Monetary Fund (IMF) dispatch a review delegation to the federal capital the next week.
The choice was made during a meeting of the economic team presided over for essentially a second day in a row by Prime Minister Shehbaz Sharif.
According to media sources, the government has decided to invite the IMF after coming to the conclusion that there is no other option but to immediately reactivate the IMF plan.
The IMF’s strict recommendations were approved by PM Shehbaz a day earlier in order to end the impasse and complete the upcoming ninth review, which is required to release the $1 billion tranche under the $7 billion Extended Fund Facility (EFF).
Additionally, it was stated that the economic team had completed a macroeconomic and fiscal framework with connected IMF requirements.
“No other choice”
The decision-makers are aware that, in order to avoid a full-blown balance of payment crisis, Islamabad is left with no choice but to break the impasse and restart the stalled IMF plan on a temporary basis.
The government aims to persuade the IMF to reduce the Petroleum Development Levy (PDL) objective for the current fiscal year from Rs850 billion to Rs550 billion in accordance with the revised macroeconomic and fiscal framework.
The FBR would continue to aim to collect Rs7,470 billion in taxes. A presidential ordinance will be published to introduce the mini-budget.