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IMF team

comming

ISLAMABAD: An International Monetary Fund team will visit Pakistan next month to review its performance against terms set under a $600 million 15-month standby loan arrangement, the IMF's resident representative said on Tuesday.

"A mission is scheduled to come in May for discussions with the authorities in connection with the second review under the standby agreement," Shamsuddin Tariq told Reuters.

He said the team would assess whether Pakistan had met conditions and targets set for the third quarter of fiscal 1995/96 (July-June) under the loan accord reached in December.

The IMF board will decide on the basis of the review whether to release the standby loan's third tranche, worth $78 million. The second $78 million tranche was released at the end of March.

The IMF talks will take place at a critical moment in the run-up to the 1996/97 budget, expected to be unveiled in June.

The Prime Minister's economic and financial adviser V.A. Jafarey said last month the next budget would be "very, very tough" even though the economy was expected to grow at least six percent this year against last year's 4.7 percent.

He said sales tax would be extended to the retail level and tax exemptions slashed. A 10 percent regulatory import duty, imposed in October as part of a stabilisation package, would be removed and maximum tariffs cut to 55 percent from 65.

The government is trying to cut this year's budget deficit to 4.6 percent of gross domestic product (GDP) from 5.6 percent last year. It has promised to trim it to 4.0 percent next year.-Reuter