IMF Executive Board reviews Pakistan’s misreporting, remedial steps
“Executive Directors expressed concerns over the misre-porting of fiscal data to the IMF between 1997 and 1999. Following their discovery of discrepancies in the fiscal data in late 1999, the authorities informed IMF staff and requested technical assistance to help with the data revision process. In response, a mission from the IMF’s Fiscal Affairs Department went to Islamabad in January 2000 to assess the magnitude of the discrepancies and the factors responsible for the discrepancies. As a result of subsequent data revisions, Pakistan’s budget deficit for 1997/98 was revised upward by 2 percent of GDP to 7.5 percent of GDP, and the deficit for 1998/99 was raised by 1.4 percent of GDP to 5.9 percent of GDP.
“Observing that the discrepancies in the fiscal data had been discovered by the current authorities themselves and had immediately been brought to the attention of the IMF staff, Directors commended the current authorities for their prompt and full cooperation with the staff in the data revision process.
“In view of the authorities’ expression of regret over the misreporting episode, their full cooperation during the data revision process, and their prompt implementation of measures to subsequently strengthen fiscal reporting, Directors felt that the proposed repurchases constituted remedial action that was consistent with practices on misreporting that were in effect at the time the inaccurate fiscal data were provided. Many Directors expressed the hope that, following these actions in response to the data misreporting episode, the authorities could move forward with a bold and wide-ranging reform program designed to achieve a high and sustainable growth path that could be supported by resources from the IMF. In this connection, a mission to Islamabad is envisaged in the near future.”