"The macroeconomic outlook remains broadly as expected at the time of the first review".
It is pertinent to mention here that an International Monetary Fund (IMF) mission, led by Ernesto Ramirez Rigo, had visited Islamabad during February 3-13, to hold discussions on the second review of the authorities' economic reform program supported under the Extended Fund Facility (EFF) arrangement. "Economic activity has stabilized and remains on the path of gradual recovery". "Development and social spending have been accelerated".
On the current account deficit, he said it has declined with helped by the real exchange rate that is now broadly in line with fundamentals.
Fiscal performance in the first half of the fiscal year was termed "strong". "Development and social spending have been accelerated", the statement said. "All end-December performance criteria were met, and structural benchmarks have been completed", he commented on the conclusion of the talks.
The talks were concluded with a complete understanding and progress in all areas was noted. The IMF Board in all likelihood will approve the recommendations of the review team, he concluded.
Official sources confirmed to The News International on Thursday night that both sides were busy ironing out differences over revenue generation efforts as the Federal Board of Revenue (FBR) wants a further reduction in its revised target of 5,238 billion Pakistani rupees but the International Monetary Fund (IMF) desires to see the plan aimed at removing distortions and expanding narrowed tax base on a permanent basis. The IMF was upset with the tax department's performance for merely collecting Rs2,098bn in the first six months of the financial year.
According to senior Finance Ministry sources, the issue of discord between the IMF and financial authorities is the former's insistence to cut down heavily of Pakistan's reliance on trade and commerce ties with China and contract FTAs with other worldwide partners.