Pakistan is expected to successfully pass the ongoing first review of its $7 billion Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF), according to a Bloomberg report, which cited informed officials and diplomats.
The report highlighted that Pakistan has made significant strides in generating revenue and implementing key measures required by the IMF. Among these efforts, the government has approved a law to tax agricultural income, sought to privatise a portion of state-owned Pakistan International Airlines (PIA), and set ambitious tax targets. These steps have been presented to the IMF as part of the review process.
Both the IMF’s office in Islamabad and Pakistan’s Ministry of Finance declined to comment on the matter, the report noted.
Pakistan initially secured the $7 billion EFF last summer to help address its ongoing economic crisis, receiving an immediate disbursement of approximately $1 billion. If this review is approved by the IMF’s board, it could unlock another tranche of funds for the cash-strapped country ahead of its annual budget, typically presented in June.
The EFF programme has been pivotal in stabilising Pakistan’s economy, with the government expressing confidence in the country’s progress towards long-term recovery.
On Tuesday, Finance Minister Muhammad Aurangzeb told Reuters that Pakistan is in a strong position as discussions with the IMF begin. “They are here. We will have two rounds of talks, first technical and then policy level,” Aurangzeb explained, adding, “I believe we are well positioned for the review.”
A report by Business Recorder on Wednesday echoed this sentiment, stating that Pakistani officials, in their meeting with the IMF delegation led by Nathan Porter, reaffirmed their commitment to the economic reforms and fiscal discipline agreed upon under the EFF.
The government has assured the IMF that it will continue adhering to the agreed economic measures, particularly in the areas of taxation and energy reforms, and will meet the loan’s conditions.
Sources revealed that the IMF team was briefed on Pakistan’s fiscal deficit, revenue collection, and provincial and primary surpluses. Officials indicated that Pakistan will submit reports detailing the implementation of the conditions set by the IMF, including an update on the first half of the current fiscal year.
Upon conclusion of the discussions, the IMF staff will compile their recommendations for review by the Executive Board, which is required to approve the release of the next $1 billion tranche.
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