Dr Abdul Wahid Soomro (MNA Pakistan Peoples Party)

Sources told Dawn on Wednesday that IMF authorities had already indicated their willingness to raise the fiscal deficit target by 0.7 per cent from the originally budgeted four per cent for the current year. – File Photo

ISLAMABAD: With fiscal deficit rising, a review mission of the International Monetary Fund (IMF) will be visiting here next week to assess the country’s financial requirements and discuss with authorities the need for a mid-year budget restructuring.

Sources told Dawn on Wednesday that IMF authorities had already indicated their willingness to raise the fiscal deficit target by 0.7 per cent from the originally budgeted four per cent for the current year.

The sources said an exchange of data with the IMF in Washington in August suggested that the fiscal deficit might go up beyond six per cent because of a higher than targeted expenditure projections by the provinces and lower revenue collections at the federal level.

WASHINGTON: The IMF board approved on Wednesday a $450 million emergency assistance for flood recovery efforts in Pakistan.
This will be a single-tranche assistance, which means that Pakistan will get the entire amount in one instalment.

The IMF board, which met in Washington, is expected to send the papers to Pakistan before Friday and the disbursement may begin next month.

The IMF had pledged this emergency assistance in a meeting with Pakistani officials in Washington in the last week of August. The IMF is also scheduled to hold the fifth review of an existing $11.3 billion loan arrangement in October.

The decision, taken after a series of meetings between Pakistani and IMF officials in Washington, removes the risk that the fund may delay or withhold future payments because of Pakistan’s inability to implement some of the conditions on time.

ISLAMABAD: The International Monetary Fund has set four pre-conditions for continuing with Pakistan’s $11.3 billion standby arrangement (SBA) and withheld the release of two remaining tranches of $2.6 billion till the government meets the criteria. 
The IMF’s review, which was due in June this year, should have been followed by the release of a $1.3 billion tranche in July. The government did not meet the performance criteria set for the quarter (April-June 2010) and the review had to be delayed. It finally took place in Washington last month. 

Under the original plan, the entire $11.3 billion loan under the SBA should have been completed before the end of this year. However, non-fulfilment of the performance criteria by the government on account of continuous breach of fiscal deficit limits for three quarters, non-implementation of value-added/reformed general sales tax with effect from July 1 and slower progress on the energy sector reforms has led to the stoppage of two tranches of $2.6 billion.