IMF tells govt to choose between mini budget and fiscal cuts

The International Monetary Fund (IMF) has told the federal government to either implement a mini-budget to make up for the Rs189 billion income gap or develop a practical strategy to rein down fiscal spending.

The first meeting with the visiting IMF team was conducted by Rashid Mehmood Langrial, the chairman of the Federal Bureau of Revenue (FBR), and Finance Secretary Imdad Ullah Bosal.

However Pakistan’s efforts, fulfilling the IMF’s requirements remains difficult. The government anticipates difficult negotiations.

The lender has previously been notified by Finance Minister Muhammad Aurangzeb that the first fiscal quarter saw the collection of Rs11 billion in taxes from distributors, wholesalers, and retailers. In the meantime, by implementing more stringent tax laws, FBR raised tax revenues.

The suggested higher fixed rates for on-grid solar energy, which could delay solar adoption, were presented to the IMF by Power Division officials.

Before February or March 2025, the lender hopes to address any possible financial deficits and put corrective measures in place to stop future budgetary slippages.

The IMF might put more pressure on a mini-budget to raise the tax-to-GDP ratio to the targeted levels if spending cuts are kept to a minimum.