ISLAMABAD, March 21: On Thursday, State Bank of Pakistan (SBP) Governor Jameel Ahmed expressed optimism that Pakistan and the International Monetary Fund (IMF) would soon reach a staff-level agreement (SLA).
He made this remark after the Public Accounts Committee (PAC) meeting, which reviewed the Finance Division’s Audit Report for 2023-24 at the Parliament House.
Responding to a media question about the timeline for finalizing the SLA, both the SBP governor and the Ministry of Finance Secretary, Imdadullah Bosal, refrained from providing a specific timeframe for the signing of the agreement.
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However, Ahmed confirmed that the virtual meetings between the government and the IMF regarding policy discussions would continue.
In terms of Pakistan’s economic performance, Ahmed shared that the remittance target for the current fiscal year has been revised to $36 billion.
He also projected the GDP growth rate for FY25 to range between 2.5% and 3.5%. The governor noted that the target for the current account deficit has been reduced, and inflation is expected to remain around 7% for the year.
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Regarding the exchange rate, the SBP governor mentioned that the central bank provides an assessment to the Finance Division based on the prevailing exchange rate at the start of the financial year.
He explained that multiple factors, such as inflation, POL prices, and market sentiment, influence the exchange rate throughout the fiscal year.
Imdadullah Bosal added that the exchange rate is initially set during the federal budget process and that the Ministry of Finance can review it quarterly or semi-annually in consultation with the SBP.
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The committee also discussed an audit objection regarding the payment of honoraria to officers and staff involved in the annual budget exercise without an approved policy.
Bosal clarified that the Finance Ministry would present a new honoraria policy to the Cabinet.
He explained that the honoraria are paid not only to Federal Board of Revenue (FBR) employees but also to staff from 50-60 other entities.
Under the proposed policy, 45% of the employees in relevant departments would be eligible for four types of honoraria, including performance-based, additional, and special honoraria.
Some PAC members raised concerns about why honoraria were being paid when an overtime payment policy for government employees exists.
Bosal responded that the Prime Minister had directed the Finance Division to present a policy on honoraria to the federal cabinet.
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In line with these instructions, the Finance Division had submitted the proposed honoraria policy to the Economic Coordination Committee (ECC) of the Cabinet.
Bosal further explained that the Pay Roll System, which processes payments on the 21st of each month, typically cannot accommodate honoraria payments since they are usually approved in the last week of June each year.
As a result, honoraria payments are processed through the AGPR’s DDO system in the final days of the fiscal year.
