The International Monetary Fund (IMF) does not expect that Pakistan’s recent flood will remove the country’s economic growth or tax collection goals for the current fiscal year.
During several meetings in Islamabad, the IMF delegation informed Finance Minister Mohammad Aurangzeb that on the basis of preliminary reviews, the economic effects of the floods appear to be limited outside Punjab, as the Express Tribune has stated.
Provincial governments in Balochistan, Sindh, and Khyber Pakhtunkhwa (KP) have reported only minor losses, which has reduced the possibility of any below revision in national growth or revenue targets.
Although the entire limit of damage to the infrastructure in Punjab is still being reviewed, the IMF indicated that it will wait for a comprehensive damage before making the final decision. For now, there is no reason to adjust your view of Pakistan’s tax revenue or economic growth in the global lender.
The IMF also pressured the Federal Board of Revenue (FBR) to show concrete progress on its change project, which was approved by Prime Minister Shahbaz Sharif last year. 55 billion in the fund. The purpose of the project is to modernize and promote the tax administration, but the FBR continues to struggle, especially when it rang its first quarter target. 3.083 trillion.
The Planning Commission of Pakistan has estimated the flood economic loss about Rs. 360 billion, about 0.3 % or GDP. Despite these disadvantages, the government is confident that it can achieve GDP growth in a range of 3.7 percent to 4 %, which is just ashamed of its 4.2 % target. Officials partially attribute this flexibility to the expected sowing of rice and sugarcane, which is expected to eliminate the loss of crops anywhere.
The IMF was also assured that flood costs could be managed by existing emergency funds, which did not require additional external resources. The current account deficit is not expected to expand, as the flood has not mobilized imports.
However, the IMF raised concerns about delaying the issuance of governance and corruption diagnostic reports, which highlights the permanent weaknesses in Pakistan’s judicial, administrative and corporate sectors. Authorities promised to publish the report within a week and is committed to tackling the IMF’s recommendations to improve the rule of law and institutional integrity.
Meeting with provincial officials, the IMF noted low costs on health and education last year. KP officials have termed a slower services regarding the post of a doctor without a doctor, while Sindh and KP have estimated their economic losses related to their floods. 40-50 billion and RS. 30 billion respectively. Both provinces said they could manage rehabilitation costs without additional federal assistance.
The situation in Punjab is under consideration, a comprehensive rehabilitation package has been planned for the flood -affected communities in this province. It will be important in the formation of a final economic approach.