What new fiscal measures has Pakistan adopted to secure IMF funds?

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Pakistan Revises Budget with New Fiscal Measures to Secure IMF Funding

Pakistan has revised its budget for the upcoming fiscal year, introducing new fiscal tightening measures as dictated by the International Monetary Fund (IMF) in a final bid to secure a stalled rescue package. The country will implement additional tax measures to raise 215 billion rupees and cut spending by 85 billion rupees. These adjustments aim to shrink the fiscal deficit and meet the IMF's requirements for the release of critical funding.
Increased Revenue Collection and Spending Targets

The revised budget sets a new revenue collection target of 9.415 trillion rupees and a total spending limit of 14.480 trillion rupees for the fiscal year beginning July 1. These figures reflect the government's efforts to improve fiscal discipline and address the balance of payments crisis. Finance Minister Ishaq Dar stated that these changes are intended to significantly improve the fiscal deficit.
Petrol Levy and Import Restrictions

A key fiscal adjustment involves an increase in the petrol levy, which will be raised from 50 rupees to 60 rupees per litre, with this new ceiling intended to be permanent. Additionally, Pakistan has announced the lifting of all import restrictions that were enforced in December. This move is aimed at reducing the current account deficit, a major concern for the IMF.
Social Safety Net Adjustments

Despite the overall fiscal tightening, the allocation for cash handouts to the poor has seen a slight upward revision. The funds designated for this social safety net programme have been increased from 450 billion rupees to 466 billion rupees for fiscal year 2024. The Finance Minister claimed that the new tax measures would not negatively impact the poor.
Efforts to Conclude IMF Programme

These budgetary revisions are part of Pakistan's final push to complete the pending review of the IMF's Extended Fund Facility, which was agreed upon in 2019 and is set to expire on June 30. The country is seeking US$1.1 billion in funding under this programme, which has been stalled since November. Securing this IMF funding is considered crucial for unlocking further bilateral and multilateral financing for Pakistan's debt-ridden economy.

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What new fiscal measures has Pakistan adopted to secure IMF funds?

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