The finance ministry has responded to a report on Pakistan’s financing concerns, affirming that the government is on track to meet its primary balance targets and successfully conclude an upcoming review with the International Monetary Fund (IMF).
In July of this year, the IMF executive board approved a $3 billion bailout program for Pakistan, addressing economic challenges faced by the cash-strapped government. An imminent program review is scheduled for the end of September.
Earlier today, a report suggested a “nearly $4.5 billion hole” had emerged in the country’s external financing plan, and the budget might “overshoot by another Rs1 trillion due to the understatement of debt expenditures.” These alleged developments were anticipated to become significant issues in the upcoming review.
Responding to the report, the finance ministry issued a statement on the social media platform X, emphasizing that responsible reporting on economic matters of national importance should be based on comprehensive information.
The ministry pointed out that the report’s reference to a “potential overshoot” in the government’s interest expenditure due to declining foreign inflows or a persistently high policy rate indicated a “limited understanding” of fiscal variables.
The finance ministry stated that the report “misrepresents” the country’s external financing requirements and interest payments for the current fiscal year. It clarified that the figures of the current budget were shared with the IMF during the bailout agreement negotiation. The ministry emphasized its continued close collaboration with the IMF, monitoring progress on all actions outlined in their agreement.
The statement further highlighted that the Economic Affairs Division and development partners conduct periodic portfolio reviews to monitor inflows from multilateral and bilateral sources. Additionally, the finance ministry maintains regular communication with commercial banks and anticipates concluding its transactions under negotiations with banks soon.
The government remains committed to maintaining fiscal discipline throughout the current fiscal year, ensuring strict adherence to the budget for FY2023-24, and keeping all expenditures in line with commitments. The Finance Division actively engages with ministries/divisions and provincial governments to meet general government targets, frequently reviewing the fiscal position to ensure fiscal stability, according to the ministry’s rebuttal.
