By Staff Reporter
ISLAMABAD: Pakistan is set to begin formal negotiations with the International Monetary Fund on Monday over its next payout under a $7 billion bailout program, a review that will focus on a tax revenue shortfall and slippage on some reform commitments.
An IMF staff mission led by Iva Petrova will stay in the country for almost two weeks, until the first week of October, to conduct the fourth review of the Extended Fund Facility and the third review of a separate climate-linked lending program, the Resilience and Sustainability Facility, officials said. Completing both would make Pakistan eligible for about $1 billion (760 million Special Drawing Rights) under the EFF and $200 million under the RSF, a total of $1.2 billion. The money could arrive by the end of November or in early December, once staff reach an agreement and the IMF’s executive board approves it.
The EFF, approved in September 2024, runs 37 months and is meant to stabilize the economy through fiscal discipline, structural reforms and measures to support long-term growth. The current review covers performance through June 30. Pakistan was mostly on track against its fiscal targets for that period, Dawn reported earlier this month, but with a major revenue shortfall and slippage in policy commitments. Those included state intervention in commodity markets, particularly wheat and sugar, in breach of an IMF condition that the government stay out of them. Local media reports said the mission will also examine whether the Federal Board of Revenue can meet the first half-yearly collection benchmark under the program, after repeated misses against annual targets
The mission began technical talks with State Bank of Pakistan officials in Karachi last Wednesday, focusing on inflation, monetary policy and the exchange rate, before moving to Islamabad to meet the finance ministry, the revenue board and other agencies. Officials told the delegation that foreign-exchange reserves had passed $17 billion, meeting a target, local media reported. The visit also includes an Article IV consultation, which IMF staff are conducting after a three-year gap.
Finance Secretary Imdadullah Bosal told a National Assembly committee on Thursday that the IMF is seeking 174 amendments to laws under the two programs, which together are worth $8.4 billion. He said Pakistan has received about $4.5 billion from the fund and completed three reviews. The changes span taxation, energy, privatization, the Sovereign Wealth Fund, sugar policy and Islamic banking. The government will put all of them before parliament, which has the final say, Bosal said. He also said Pakistan has yet to make significant progress on some targets, including those on energy-sector circular debt and education spending, according to local broadcasters.
The fund has spoken well of the program so far. Managing Director Kristalina Georgieva praised Pakistan’s performance in a meeting with Prime Minister Shehbaz Sharif on the sidelines of the U.N. General Assembly last week, Dawn reported. Mahir Binici, the IMF’s Pakistan representative, said in July that performance under the program had been strong
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