According to The Express Tribune, The International Monetary Fund (IMF) has agreed to relax budget deficit ceiling aimed at allowing Pakistan to meet emergency fiscal needs to fight deadly coronavirus contagion that has started spreading rapidly.
“The IMF has agreed that spending on the coronavirus will not be counted for budget deficit target purposes,” Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh told The Express Tribune on Monday.Subscribe to The Economist Magazine in Pakistan and get your copy delivered at your home.
The adviser said the government’s plan to fight with coronavirus will make sure that it does not further slow down wheel of the economy – a statement that indicates easing monetary and fiscal tightening.
The Ministry of Finance has so far sanctioned over Rs5.4 billion including Rs5 billion releases to the National Disaster Management Authority (NDMA) for emergency response purposes.
An amount of Rs300 million has already been given for quarantines and Rs85 million for Directorate of Health Establishment to beef up screening arrangements for passengers at airports.
The IMF decision to relax the deficit condition will ease restrictions on Pakistan that under the $6 billion deal is bound to keep the primary budget deficit limited to only Rs264 billion in this fiscal year 2019-20. The primary deficit is the difference between revenues and expenditures, excluding interest payments.
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