ISLAMABAD, AUG 31: With Pakistan facing a critical shortfall in tax collection and a significant external financing gap, the government is exploring alternative measures to secure approval for the stalled International Monetary Fund (IMF) programme.
The country’s economic managers are reportedly considering a mini-budget and potential cuts to the annual development program as options to meet the stringent conditions set by the IMF, sources close to the matter have revealed.
The Federal Board of Revenue (FBR) reported a revenue shortfall of Rs115 billion for August, marking the largest deficit in the past 20 months.
This shortfall, coupled with the challenge of bridging the external financing gap, has put the government under intense pressure to meet the IMF’s benchmarks, which are critical for the release of further funds under the $3 billion Stand-By Arrangement.
Economic experts suggested that the mini-budget, which would likely include additional taxation measures, is one of the primary tools being considered to address the fiscal challenges.
The alternative of slashing the Public Sector Development Program (PSDP) could also be on the table, though such cuts would risk stalling ongoing infrastructure and development projects across the country.
The IMF has consistently emphasized the need for Pakistan to enhance its revenue generation efforts and ensure fiscal discipline as prerequisites for financial support.
The government’s struggle to meet these targets could jeopardize not only the IMF program but also the broader economic stability of the country.
