IMF PROGRAM

PRESENTED BY

ALKASH JADHWANI >MUHAMMAD MOIZ

HAIDER > ZAKARIYA KHAN
Tackles

 In June 2020, $1.4 Billion by IMF to finance negative impacts of Covid-19

 In June 2021 IMF Had to issue a payment of $1 Billion after 6th review program
but review identified lack of implementation of many reforms

 Consequently the program up to 7th review due in September 2021

 Projections were given in 5th review

Projections for 2021-22

 National Economic Council approve projections for 2021-2022 .

 IMF's GDP Growth rate to be slower at 4% as compared to 4.8% of Federal Govt.
 IMF Estimates total investment to GDP ratio is 15.5% of GDP as compared to
14.4% of Govt plan
 IMF expect private investment will be more buoyant in 2021-2022 . As appose to
it large level public investment finance through budgetary borrowing
 Budget deficit by Govt 7.7% by IMF 6.3%
Projections for 2021-22

 .2 % less Govt spendings but more Development Expenditure

 In case of BOP , $2.2 Billion down in 2021-2022 as compared to IMF program of

$5.4 Billion

 .May 2021 , witnessed return to current account deficit of over $600 Million

 In 2021-2022, in both projections foreign exchange reserves rising

Graph
Program Suspended for 1 year

 IMF reject Pakistan's request for loan

 A new agreement done between Pakistan and IMF in which several amendments
have been made about state Bank of Pakistan

 Details of agreement are provided in Tribune by Shahbaz Rana on 24

November,2021
New Agreement IMF and Govt

 Not 100% profit to Govt until monetary liabilities cover

 20% profit should be in SBP coffers
 IMF reject all amendments of 1956's SBP act except taking secretary finance on
board but no right to vote of 96% shareholders' representatives
 Govt will appoint SBP board members
 Governer SBP said this agreement made to secure loan of $1 Billion in next
januarary Ban on Govt Borrowing from SBP under IMF till September-22
 Govt can remove Governer SBP for miss-conduct
 SBP can only purchase Govt securities in secondary market
 Governer SBP is only accountable to NAB
 IMF reject Govt's infation target to SBP
Reasons of IMF's involvement

 Setting of Interest rate & Money printing

 Neocolonial system
THE REFORMS AGENDA (2020-2021)
 The IMF program focuses strongly on taxation reforms to lead to a sizeable increase in
the tax-to-GDP ratio.

tax-to-GDP ratio = Revenue of Nation during period

Gross Domestic Product

The Reforms of Taxation

Corporate Income Tax:

withdrawal of tax credits and allowances and elimination of exemptions.
Introduction About IMF

 IMF Established in 1944 after the Great Depression(1930), which is founded by

44 countries.
 The 1st motive of the IMF is to help developing countries make economic
stabilities, Reduce Poverty, and Help them grow constantly.
 190 countries are members of the IMF Program.
 Nathan Porter led the current IMF program of Pakistan.
 Pakistan borrowed 23rd times from the IMF.
 IMF is interested in the Fiscal side of the Economy.
Personal Income Tax:
 The first proposal is to increase the progressivity of the tax by reducing the number of
slabs from 11 to 5. Simultaneously, there will be a halving of tax credits and allowances.

 Sales Tax: The proposal is to eliminate non-standard preferential rates and tax
exemptions on items in the different schedules of the Sales Tax Act, of 1990.
A fundamental reform proposed is the integration of Federal sales tax on goods and
Provincial sales on services along with harmonization of the tax rates. Also, the petroleum
levy is to be raised to Rs 30 per liter.
Contingency planning

 PREPARING FOR PREDICTABLE AND QUANTIFIABLE CRISES

 PREPARING FOR UNEXPECTED AND UNWELCOME EVENTS

 AIM IS TO MINIMIZE THE IMPACT OF FORESEEABLE EVENTS

 WE CAN ALSO CALLED IT COLLOQUIALLY OR PLAN B

If Pakistan withdraws from the IMF
program or program is terminated by IMF
then Pakistan will face problems in the
form of unemployment and inflation
Home grown strategies are given below

 1) 2021_22 external debt repayment is $14.7billion .

 $4.7 billion on Chinese projects largely on CPEC.
 $2.6 billion to multi.leteral.
 $4.4 billion international commercial banks .
 $1 billion sukok bond (partial ownership in debt assets business or
investment).
 $1 billion to the IMF
 2)oil deferred payment of UpTo $3 billion from Saudi Arabia
 3)Roshan digital program especially Naya Pakistan
certificates should be enhanced
 4)Debt in 2021_22 reduced by external financing need .on
non essential goods custom duty plus additional duty plus
regulatory duty
 5)Exports should be encouraged
 6)Progressive taxes should be restored
#THE_EN
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