Ishaq Dar leaves for US to hold talks with IMF, World Bank

ISLAMABAD: Finance Minister Ishaq Dar left for the United States Tuesday to attend the annual meetings of the International Monetary Fund (IMF) and the World Bank, said the finance ministry.

Sources privy to the matter said that on the sidelines of meetings from October 10 to 16, Ishaq will make a formal request to the IMF senior officials to revise the macroeconomic framework for the current fiscal year 2022-23 by lowering the GDP growth rate, hiking inflation and upward adjustments of twin deficits known as the budget deficit and current account deficit.

Islamabad is all set to make a request to the IMF to make the conditions attached to the Extended Fund Facility (EFF) lenient, especially freezing fuel price adjustment of electricity and petroleum development levy on POL products for the next few months to provide some relief to the inflation-stricken masses.

Pakistan will also request to relax the budget deficit target for the current fiscal year as severe floods might damage its revenue mobilisation efforts and increase pressures on the expenditure front. The government has restricted the budget deficit target at 4.9% for the current fiscal year under the IMF programme and throwing a revenue surplus of Rs153 billion till end June 2023.

The request to revise the macroeconomic framework will be made for the current fiscal year in the wake of severe floods that have caused devastation and required construction costs of over $30 billion for the struggling economy of Pakistan.

The annual meeting of the IMF/World Bank will take place from October 10 to 16 in Washington DC. Economic Affairs Division Secretary Kazim Niaz had already departed Islamabad for Washington to attend the upcoming meetings of BWIs.

Under the macroeconomic framework, the government has assessed that the country’s GDP growth might hover around 2% for the current fiscal year against the initially envisaged target of 5%.

The economic loss has been estimated at Rs2.4 trillion for the current fiscal year. It was estimated that unemployment will be increased due to the loss of 1.8 to 2 million jobs and poverty may hike by 4.5% to 5%, implying that nine to 12 million people will fall below the poverty line.