ISLAMABAD - International Monetary Fund is flaunting an impression of dissatisfaction over government’s projections of economic targets, as IMF has estimated different figures of economic figures than Pakistan including GDP growth, budget deficit and revenue collection targets for the current fiscal year 2013-14.
IMF’s report, “Article IV consultation and request for an extended arrangement under the extended fund facility”, and Pakistan’s budgetary documents have presented different economic projections for the current fiscal year 2013-14. The different projections indicate that Pakistan has assured the Fund for revising economic targets likely to introduce imposition of taxes and reduction in developmental expenditures.
Against the Pakistan’s projection of budget deficit of 6.3 percent of Gross Domestic Product (GDP) or Rs1.651 trillion, the Fund estimated that country’s deficit would be 5.8 percent of GDP or Rs1.463 trillion - a difference of approximately Rs180 billion. Another major different between Pakistan and IMF is on revenue collection target for the ongoing financial year 2013-14. The government of Pakistan has estimated that revenue collection target for the ongoing financial year would be Rs 2,475 billion. However the Fund projected that Federal Board of Revenue would be able to collect only Rs 2,345 billion – a difference of Rs 130 billion. It suggests that government would have to introduce taxation measures to reach the revenue collection target of Rs 2,475 billion if IMF assessment is true.
IMF has projected that Pakistan’s real GDP growth is estimated at 2.5 percent for the current financial year 2013-14. However, the government of Pakistan has projected 4.4 percent GDP growth rate for the same period. The IMF estimates 10 percent inflation for the current fiscal year as compared to the budgeted projection of 8 per cent.
The IMF has indicated a reduction from the budgeted allocation for Public Sector Development Programme (PSDP) by a massive Rs 321 billion an estimated reduction of Rs 120 billion in federal development expenditure with total allocation under PSDP projected at Rs 420 billion as opposed to the budgetary allocation of Rs 540 billion for the current fiscal year; and provincial development spending also subjected to a reduction of Rs201 billion in the current fiscal year under the EFF programme with total provincial PSDP expenditure projected at Rs 414 billion under the programme against Rs615 billion estimated in the budget.
The Nation has tried to contact Secretary Finance Dr Waqar Masud and Advisor to Finance Ministry who is also spokesperson Rana Assad Amin to get their official comments on the issue but they did not respond to the call.