ISLAMABAD (Mudasar Ali Rana) – The government of Pakistan has formally requested the IMF (International Monetary Fund) to approve a special Prime Minister’s Relief and Recovery Package for flood affected area.
The relief package is expected to be financed from the Rs389 billion emergency fund allocated in the current fiscal year’s budget.
Reliable sources indicated that the IMF has asked Pakistan to provide a needs-based assessment report to accurately estimate flood damages before approving the relief initiative.
Preliminary estimates suggest that KP suffered damages of Rs40 billion to Rs50 billion, while Sindh reported Rs40 billion in losses. However, revised figures from KP may lower the damage estimate to Rs30 billion. Balochistan reported no significant losses, and talks with Punjab are scheduled for today.
During ongoing technical discussions, the Ministry of Finance, along with representatives from Sindh, KP, and Balochistan, briefed the IMF mission on various economic indicators, including fiscal performance, budget surplus efforts, and flood-related expenditures.
KP officials stated that a budget surplus could be achieved if the federal government releases funds under the NFC Award and allocates shares to the merged tribal districts.
The IMF also asked for detailed reports on the utilisation of relief funds, current recovery efforts, and disaster risk management expenditures. In parallel, the IMF has demanded the publication of its long-awaited “Governance and Anti-Corruption Diagnostic Assessment Report” as part of the structural benchmarks.
The report highlights systemic issues in public finance management, tax administration, FBR reforms, and auditing mechanisms.
The IMF is also pushing for greater transparency, including the public disclosure of assets of civil bureaucracy, excluding military and judicial officers. The assessment further urges simplification of the complex tax system, reduction in multiple tax rates, and elimination of excessive withholding and advance taxes.
During the introductory economic review session, Finance Minister Muhammad Aurangzeb, State Bank Governor Jameel Ahmad, and FBR Chairman Rashid Mehmood Langrial briefed the IMF mission on Pakistan’s economic performance. The IMF delegation reportedly expressed satisfaction with the government's preliminary economic measures but emphasized the need for sustained structural reforms. Negotiations between the IMF team and Pakistan's economic managers are set to continue today.
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