IMF’s charge sheet against Imran Khan. The report says that the PTI government break the promise and reduce the prices of petrol and electricity.
In this fiscal year, the economic growth rate is expected to be 3.5%. Inflation rate 20%, unemployment rate 6%, revenue and grants 12.4% and expenditure 17.1%, current account deficit 2.5%.
Shahbaz Sharif took concrete steps to bring the debt program on track. He assures to restore GST and increase the petroleum levy to Rs 50. Account deficit will decrease.
According to the details, according to the IMF, the inflation rate in Pakistan will remain unchanged this year. And the increase in food and petroleum prices may lead to protests and demonstrations at the public level.
Instability may affect the implementation of program policy decisions and financial adjustment strategies.
The increase in energy prices and the depreciation of the currency will increase the inflation in Pakistan this year. This is because of Ukraine crisis and the increase in the prices of commodities at the global level
While due to the strict monetary and fiscal policies, the inflation will decrease in the next financial year 2023-24.
If the monthly performance of Pakistan’s tax revenue targets does not improve. And fiscal program targets are not achieve. Data for the first quarter shows concern, the govt has to take 4 emergency measures as promised to the IMF.
Among these steps, immediate implementation of general sales tax on petroleum products. Its standard rate of 17%.
Secondly, the GST exemption on sweet drinks will cancel to collect revenue of 60 billion rupees.
Thirdly, unnecessary tax exemptions to exporters will remove. Additional impose federal excise duty on Tier 1 and Tier 2 cigarettes. That will be at least Rs 2 per cigarette to generate revenue of Rs 120 billion.
Implementation of levy and increase in electricity prices is to fulfill the commitment of the government.
According to the report, the previous government deviate from the IMF commitments by giving a relief package in February 2022.
PTI government reduce the price of diesel and petrol. They educe the price of electricity by Rs 5 per unit. And also give tax amnesty and exemption.
Measures like increasing pensions and providing additional food subsidies increase the budget deficit by 1.5 %of GDP last fiscal year.
After some delay, the new govt begins to reverse these decisions and the IMF program get backs on track.
According to the country report, after the approval of the 7th & 8th reviews of the IMF. The pressure on the value of Pakistan’s currency and external balance will continue.
The small majority in parliament and pressure from allies may make it difficult to implement program’s policy decisions.
According to the report, the economic growth rate of Pakistan this fiscal year is expected to be 3.5. Inflation rate is expected to be 20%, unemployment rate will be 6%. Revenue and grants will be 12.4% and expenditure will be 17.1%.
According to the report, the current account deficit is expected to be 2.5%. The total public debt of Pakistan will decrease to 72.1% of GDP. That was 78.9% last year, external debt will be 37.1% of GDP and domestic debt will be 68.2%.
According to the report, the current government assures the implementation of the program. They have implement four pre-conditions. Including the approval of the budget for the current financial year including personal income tax by Parliament. Signing MoUs with provincial governments. Withdrawal of the relief given in February. The current govt makes electricity tariff adjustment in July-August.