The Inter-national Monetary Fund (IMF) mission will review economic and policy developments besides discussing the FY12 Budget with Pakistani authorities in Dubai," sources said. The security alert in Pakistan has risen considerably after the killing of Osama bin Laden by US Navy Seals, which led the IMF team to cancel its scheduled mission to Pakistan in the second week of May.
Pakistani delegation to Dubai will be headed by Finance Minister Abdul Hafiz Sheikh while Secretary Finance, Dr Waqar Masood, Additional Secretary Finance, Arshad Mirza and Federal Board of Revenue Chairman Salman Siddiq will also be part of the Pakistan team. Scheduled meetings with the IMF will take place from May 11 to 17. According to the IMF program note on Pakistan dated April 7, "The budget deficit has increased, reaching 6.3 percent of GDP in 2009/10, and inflation has been on the rise, recording 13 percent in March 2011.
The external position has strengthened, the exchange rate has been stable, and the current account deficit has narrowed considerably, helped by lower import growth, higher exports, and a robust increase in workers'' remittances. Foreign currency reserves have increased from $3.3 billion in November 2008 (before the SBA approval) to over $14 billion at present." The stalled IMF programme is centered on the growing fiscal deficit as stated in the second quarterly report 2010-11 of the State Bank of Pakistan.
According to sources, the IMF had been assured that new revenue measures would be introduced in the budget as a package and would include Reformed General Sales Tax, tax on farm income, services and wealth through a broad-based economic move, both at the federal and provincial levels. Sources in the ministry said Pakistan does not have a credible framework on the fiscal side and without sustainable framework economic stability would remain a challenge on revenue and expenditure sides.