Prime Minister Shehbaz Sharif reaffirmed on Thursday the resolution of his government to accelerate institutional reforms and consolidate macroeconomic stability, saying that Pakistan was now making the transition from recovery to sustained growth.
“With the grace of Allah, Pakistan is now going from economic stability towards sustainable growth,” said Shehbaz Sharif during a high -level meeting with a delegation of the International Monetary Fund (IMF) led by Jihad Azour in the prime minister’s office.
He stressed that the main priority of the government was not only to maintain macroeconomic gains, but also to accelerate comprehensive institutional reforms, crucial for long -term resistance.
Discussions during the meeting focused on the implementation of the current Program of the International Monetary Fund (IMF) of Pakistan.
Both parties expressed satisfaction on the progress made and the positive impact of the current reforms.
The IMF delegation welcomed the reforms made by Islamabad and ensured the continuous support of Pakistan’s economic stabilization and the inclusive growth agenda.
The meeting was also attended by key members of the cabinet, including federal ministers, Ahsan, Iqbal Cheema and Muhammad Aurengzeb, Secretary Finance Imdadullah Bosal, FBR Rashid Mehmood Langial President and senior officials.
The regional director of the IMF, Jihad Azour, visits Pakistan this week in the midst of negotiations for the approval of the new budget, since both parties are taking time to converge in key issues of increasing taxes and the rationalization of expenses.
Government sources told Express PAkGazette that Jihad Azour, the director of the IMF for the Middle East and Central Asia, is visiting Pakistan 10 days after the approval of the second section of loan of the program of $ 7 billion, despite the opposition of India. Azour’s visit is a testimony of soft relations between the lender and the borrower, despite the negative campaign of New Delhi.
Both the Ministry of Finance and the IMF Resident Representative remained with tight lips about the purpose of the visit at a time when IMF personnel are already in Pakistan to reach an agreement on the new budget for fiscal year 2025-26.
A senior government official said that the Government would address some pending problems related to the budget with the IMF director, particularly with respect to the main spending articles. The IMF has imposed a new condition for Pakistan that the Government must ensure the parliamentary approval of the new online budget with the IMF personnel agreement to meet the objectives of the program. This leaves little space for the government to implement its own agenda, although Prime Minister Sharif wants to provide relief to the wage class.
The sources said the fiscal objective, defense spending and some problems related to subsidies were being discussed. The federal government has decided to assign almost RS2.504 billion for defense spending in the next fiscal year, which is 18% higher than this year’s assignment. However, the IMF personnel report published on Saturday showed a defense expense at RS2.414 billion, an increase of 12%. Some subsidies and assignments have not been completed either.
The Federal Income Board (FBR) presented on Monday the tax proposals for the next fiscal year to Prime Minister. The Prime Minister also reported that the fiscal objective of the FBR may be around RS14.07 billion, which is approximately RS240 billion less than the mutually agreed objective between the IMF and the government for fiscal year 2025-26, they added.
However, there is the possibility that the Government can substantially increase oil collection rates in the 2025 financial bill. The IMF has projected the collection of oil tax at more than RS1.3 billion rupees for the next fiscal year, which could become the source of income without taxes larger if the Government begins to collect RS100 per liter in the oil of the oil and diesel tax. The current rate is RS78 per liter.
