UPDATE 1-IMF to review Pakistan budget in talks-official

* IMF talks with Pakistani officials begin on Monday

* Talks to weigh impact of floods on Pakistan’s budget

* IMF to help assess ongoing economic prospects

(Adds details)

WASHINGTON, Aug 21 (BestGrowthStock) – The International Monetary
Fund said on Saturday it will review Pakistan’s budget and
economic prospects following catastrophic flooding during talks
with senior Pakistani government officials starting on Monday.

Pakistani Finance Minister Abdul Hafeez Shaikh and other
senior Pakistani finance officials are traveling to Washington
for the talks with the IMF, which will also be an opportunity
to speak directly to the Obama administration about aid.

The IMF talks are set to focus on the future of Pakistan’s
$10 billion IMF program agreed upon in 2008, which was already
off-track before the floods hit. The disaster is set to
compound Pakistan’s economic woes as the government is forced
to deal with more than 4 million left homeless, along with
widespread damage to crops and infrastructure.

“The scale of the tragedy means that the country’s budget
and macroeconomic prospects, which are being supported by an
IMF financed program, will need to be reviewed,” Masood Ahmed,
IMF Director for the Middle East and Central Asia, said in a
statement.

He said the talks will evaluate the economic impact of the
flooding, assess the measures needed to address the damage, and
discuss ways in which the IMF can help.

Pakistan said last week the floods meant the country would
miss this year’s 4.5 percent gross domestic product growth
target, while its fiscal deficit is now projected to widen to
over 8 percent of GDP. The government had targeted a fiscal
deficit of 4 percent of GDP for fiscal year 2010/2011.

The talks come as Pakistan, which is embroiled in a battle
against Islamist militants, is appealing for international aid
to cope with the disaster and donors are worried over misuse of
the funds.

Misgivings about the Pakistani government and concerns
about corruption have been cited by analysts as reasons for the
slow response by Western donors to the floods.

Even before the floods, donors were foot-dragging on aid
for Pakistan.
(Reporting by Lesley Wroughton, Editing by Todd Eastham)
(For more Reuters coverage of Afghanistan and Pakistan, see:
http://www.reuters.com/news/globalcoverage/afghanistanpakistan)

UPDATE 1-IMF to review Pakistan budget in talks-official