IMF asks Pakistan to share details of $16bn post-flood reconstruction plans

IMF - The News Today- TNT

ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to share more details for undertaking the post-flood reconstruction at the cost of $16 billion, prior to taking a decision to dispatch its review mission to accomplish the pending ninth review under the Extended Fund Facility (EFF) programme.

However, the IMF did not give any confirmed date for the completion of the 9th review but the Federal Government asked for kick-starting policy-level parleys within the ongoing month.

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Keeping in view the jittery markets, the IMF and Pakistani side decided to continue the exchange of data in the coming days, and then possibilities will be explored to complete the ongoing review.

The Ministry of Finance claimed that the IMF agreed to allow adjustment for spending related to the flood-affected area during the phase of rehabilitation and reconstruction.

In crux, Pakistan and the IMF decided to continue the exchange of data with renewed efforts for completion of the ongoing review and release of the $1 billion tranche by the end of December.

A top official said that the Pakistani side discussed the possibility of a mini-budget on account of slapping windfall gain tax on lofty profits earned by the banking sector through alleged manipulation of the exchange rate.

The officials in Finance Division confirmed that the IMF showed its willingness to send its review mission, once provided additional information on the reconstruction of floods.

The IMF was told that the Earthquake Reconstruction and Rehabilitation Authority (ERRA) undertook reconstruction work for several years in the aftermath of the 2005 earthquake and then floods struck in 2010.

The reconstruction work of the 2022 floods might continue for several years, so the question of utilising $16 billion in one year does not arise.

“Our primary deficit has been restricted within the envisaged limits of the fixed surplus target; however, the overall deficit might escalate mainly because of increased flood-related expenditures,” the officials said.

The government also assured the IMF that the joint sitting of parliament would be convened for approving the State Owned Enterprises (SOEs) law 2022.

On external financing needs of $32 to $34 billion, the IMF was told that the Pakistani side got assurances for getting deposits, additional deposits, jacking up the SWAPS agreement and oil facility on deferred payments to the tune of $13 billion.

The remaining amounts on the external financing front will be managed successfully, they added.

Read more: Pakistan to continue policy of engagement with global nations: FO

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