The International Monetary Fund (IMF) has asked Pakistan to freeze all major non-development expenditures heads, including salaries and defence, in order to bring down primary deficit. The IMF staff proposed Pakistan to to undertake massive fiscal adjustments of Rs1,150 billion to bring down primary deficit at negative 0.4 percent of GDP for the upcoming budget 2020-21 post COVID-19 pandemic.
Any major deviation from path of ‘fiscal discipline’ could derail the IMF programme by creating problems for completion of second review and release of third tranche worth $450 million under the Fund’s EFF programme.
Source: The News
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