Sunday, October 1, 2023

IMF charged Imran Khan government with fiscal indiscipline: report

The International Monetary Fund (IMF) has criticised the policy reversals and charged Imran Khan government for fiscal indiscipline. According to reports, the programme execution worsened quickly after the conclusion of the sixth review in November of last year.

IMF completed the 7th and 8th reviews and reviving Pakistan’s delayed Extended Fund Facility (EFF) programme. Whereas, the IMF charged Imran Khan government and reported that intended budgetary adjustment has undone. Moreover, some important EFF pledges have overturned.

Three continuous performance criteria (PC) have also not met in addition to two end-of-June PCs. More than that, seven structural standards (SBs) havee not satisfied. According to the findings, serious budgetary lapses occurred because of political turmoil.

After making pledges of budgetary discipline, the previous administration offered a 4-month ‘relief package’ in late February. A rise in the minimum wage, public pay and pension increases and new food subsidies accompanied these reforms.

However, recent government action has included enacting an aggressive budget targeting a primary surplus. It dramatically hiking the policy rate, doing away with post-tax fuel subsidies and raising fuel taxation and electricity rates. They intend to increase oversight and take appropriate measures to protect the stability of the financial industry.

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