Pak to receive $1.4bn in Multilateral Aid

October 3, 2023

In the fiscal year 2024, Pakistan anticipates receiving a combined total of $1.4 billion in financial aid from international organizations, including the International Monetary Fund (IMF), World Bank, and Islamic Development Bank (IsDB). Dr. Shamshad Akhtar, the Caretaker Finance Minister, provided a breakdown of this aid, with $700 million expected from the IMF, $450 million from the World Bank, and the remaining $250 million disbursed by the IsDB. Additionally, Pakistan has sought support from China and Saudi Arabia to address its external financing gap and has requested an expansion of the oil deferred facility from Saudi Arabia to alleviate external payment pressures.

With a projected current deficit of approximately $6 billion and a financing requirement of about $20 billion in FY24, the nation is navigating fiscal challenges. Dr. Akhtar emphasized that providing subsidies is not in line with IMF standards, noting that countries with $400 billion in reserves can afford such subsidies. Nevertheless, in the previous year, Pakistan allocated subsidies totaling Rs1,300 billion to various sectors to support development.

Regarding tax collection issues, the caretaker finance minister stressed the need to establish a tax division due to the significant backlog of pending tax cases, amounting to around Rs 3 trillion. Dr. Akhtar also highlighted the importance of consulting with provinces before imposing taxes on real estate and agriculture, suggesting a review of immovable property taxation. Furthermore, provinces have been advised to reduce spending and utilize funds efficiently.