Losses at state-owned enterprises sought by IMF

Losses at state-owned enterprises sought by IMF. According to sources cited by Geo News on Monday, the International Monetary Fund (IMF) has requested a fresh report from the Finance Ministry on the losses incurred by state-owned enterprises. The report is being submitted by the end of the month.

This is based on information collected from sources within the fund. The global fund’s mission – who are currently visiting Pakistan to review the loan tranche – has refused to accept reports based on old data.

A mission from the International Monetary Fund, the International Development Association, is currently visiting Pakistan in order to complete the first review of the $3 billion loan programme and consider the possibility of releasing a second tranche of $700 million by December 2023. After the talks have been concluded, it is expected that both sides will be able to reach an agreement at the staff level, and the tranche will be approved.

A technical-level meeting between a Pakistani team and an IMF delegation is taking place at the moment, while the policy-level meeting will take place next week from November 13-16.

A spokesperson for the global lender explained that the lender had asked the Central Monitoring Unit to submit its first updated assessment report for the first quarter of the current financial year as soon as possible.

According to sources, the Finance Ministry has, however, requested a longer deadline from the IMF in order to submit the report by the end of December 2023.

This is the team’s response to the delegation of the Fund, in which it stated that the government-owned enterprises were under scrutiny at the moment and that a new statistical report was about to be completed.

Pakistan’s fiscal framework was the focus

The News reported earlier today that the IMF mission was visiting Pakistan on behalf of the $3 billion standby arrangement (SBA) and was focusing on Pakistan’s fiscal framework for the ongoing financial year 2023-24, with the objective of turning the primary deficit into surplus.

Since there are escalating debt servicing costs of Rs1 trillion for the current fiscal year, the IMF is not concerned about the overall rising fiscal deficit. In the near future, the government wants to keep a lid on the debt servicing bill until it reaches Rs7.3 trillion, but according to the International Monetary Fund (IMF), it may balloon up to Rs8.3 trillion before the end of June 2024.

In order to calculate a primary surplus, one would exclude debt servicing in the form of principal and mark-up amounts for domestic loans as well as foreign loans in order to calculate a deficit.