Pakistan To Welcome IMF MD In October

Christine Lagarde, the Managing Director of IMF has accepted Pakistan’s invitation to visit the country in October 2016 where she will meet the governmental authorities to discuss the post-loan agenda. The discussion is considered very important as this covers the differences among domestic stakeholders on the subject of the real impact of IMF aid on the economy. Takehiko Nakao, who is the President of Asian Development Bank, will also be along with the MD of the International Monetary Fund on the visit to Pakistan.

The visit is also being considered an important move as this would be first time in last decade when Pakistan will welcome someone from the Global Lender. Though, there is no specific date given for Lagarde’s visit, it is expected that the head of IMF will arrive Islamabad on October 23, 2016 which is a period of 30-day after the 3-year Extended Fund Facility of $6.2 billion for Pakistan will be ended.

According to the IMF representatives, the board will approve the last loan installment which is about $102 on September 28, 2016. This tranche will be in addition to approval of the 12th review of Pakistan’s economy for a period of April to June 2016. The board needs to ease some conditions in order to help the government clear the loan who has already missed two important targets. Not to mention, IMF lent Pakistan a 3-year package in September 2013 that was aimed at avoiding non-payment for international debt repayments. It also introduced structural reforms in energy, taxes and economic areas.

Tokhir Mirzoev, the spokesperson of IMF Resident in Pakistan told the media, Pakistani government had officially sent an invitation to the managing director which she has conditionally accepted. According to Mirzoev, it was actually necessary that Lagarde discuss Pakistan’s economic policies with authorities, industrial community as well as other stakeholders in the country. It is also expected that there will be a general discussion on global economy as well.

Pakistani government claims victory when the package is being ended in a month time. According to the Finance Minister, the financial plan deficit has been lowered from 8.2 percent of GDP in 2013 to 4.6 percent by the end of 2015-16 and the financial system has developed at a decent pace of 4.7 percent.

However, experts are questioning these achievements since the government has forsaken the privatization programme and therefore couldn’t deal with the loan taken for energy sector. Moreover, it’s also observed the authorities have failed to widen the tax base.

On the other hand, Dr Hafiz Pasha who has served the country as former finance minister penned down an article highlighting how the government has been playing with the data. He point outs that the government’s claim about “budget deficit” has actually declared a statistical inconsistency of Rs. 212-billion fiscal accounts of 2015.

Over the last three years, the increasing inconsistency was as huge as Rs605 billion which had never happened by this time. It is a sign of a virtual collapse of the budgetary process which unfortunately the IMF staff mission prefers to ignore, Pasha said.