As per Finance Minister Shaukat Tarin, the International Money Fund (IMF) has asked Pakistan to describe how it plans to fund a $1.5 billion subsidy package unveiled by Prime Minister Imran Khan.
There are no problems. Tarin stated that it has informed them as to where the funding will come from. In addition, the IMF requested information on the resources used to support the fuel and power subsidies, which Pakistan has stopped for the next four months until the new budget is approved.
The IMF has begun the seventh assessment of Pakistan’s $6 billion rescue plan agreed upon in 2019, and Tarin has stated that he will meet with the lender for the final time on Tuesday.
The IMF requested to review the dividend agreements of State-Owned Enterprises (SOEs), as well as information on the spare cash the central government will receive from provinces.
He earlier stated that some of the subsidy money will come from the above-target receipts in Pakistan this fiscal year.
Tarin stated earlier this month that income will reach 6.1 trillion Pakistani rupees ($34.2 billion), up from a target of 5.8 trillion rupees.
The south Asian country had to implement fiscal tightening measures in order to pass its most recent IMF review, which was delayed by months due to the government’s inability to complete the preceding action necessary by the lender in order to release $1 billion in February.