Tax Collection
Pakistan’s economic team has laid out an extensive macroeconomic framework to the International Monetary Fund (IMF), outlining ambitious targets, including a tax collection goal surpassing Rs12 trillion for the fiscal year 2024-2025, as per sources familiar with the discussions.
The ongoing policy-level dialogues between Pakistani authorities and the IMF are crucial for shaping the next phase of engagement between the two parties.
Pakistan recently concluded a short-term $3 billion Stand-By Arrangement, underscoring the government’s emphasis on securing a fresh, longer-term program to address economic challenges effectively.
Market observers, like Wall Street bank Citi, anticipate Pakistan to finalize an agreement with the IMF for a new four-year program potentially amounting to $8 billion by the end of July.
According to insider information, the IMF has projected a GDP growth rate of 3.5% for FY25, slightly lower than the Finance Ministry’s forecast of 3.7%.
Inflation estimates for the same period vary, with the IMF suggesting around 12.7% compared to the Finance Ministry’s more conservative estimate of 11.8%.
A significant portion of the budget, approximately Rs9.7 trillion, is earmarked for interest and loan payments in the upcoming fiscal year.
The IMF anticipates a current account deficit of $4.6 billion, slightly higher than the Finance Ministry’s target of $4.2 billion.
Projections for exports and remittances paint a mixed picture, with forecasts exceeding $61 billion in total. While the export target stands at $32.7 billion, remittances are expected to contribute $30.6 billion to Pakistan’s economy.
Conversely, import bills are estimated to amount to $61 billion, with a $3 billion disparity from the Finance Ministry’s estimates.
Meanwhile, the fiscal deficit is projected to hover around Rs9.6 trillion, with allocations of Rs1 trillion for the Public Sector Development Program (PSDP) and an expected rise in the pension bill from Rs801 billion to Rs960 billion.
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