The approval of two budgetary support loans worth $750 million has been delayed by the World Bank. The reason for this delay is the lack of progress on some of the agreed conditions earlier on which includes disagreement among provinces over general sales tax (GST) on services harmonization.
Due to this delay, the restoration of budgetary support of Pakistan will also get postponed. It was suspended 4 years ago due to the deterioration of macroeconomic indicators.
It was back in February 2016, last time when World Bank approved a budgetary support loan. According to the World Bank’s official documents, there is a World Bank board meeting scheduled for 19th March in order to approve a $500-million development policy credit called the Resilient Institutions for Sustainable Economy (RISE) programme.
Also, another policy credit of $250 million for the Securing Human Investments to Foster Transformation (SHIFT) programme is delayed as well.
For the second time, the World Bank has delayed these loan approval. Initially, they were scheduled to be approved during the present fiscal year 2019-20 second quarter.
The delay in the $750-million loans will affect the external financing projections of the government for the current fiscal year.
A World Bank spokesperson said, “Discussions with authorities on RISE and SHIFT are continuing. Good progress is being made.”
The spokesperson said, “As and when they (RISE and SHIFT) are ready, they will be considered by the executive directors of the World Bank for approval.”