By Staff Reporter
KARACHI: Pakistan is on track to satisfy nearly all of the International Monetary Fund’s quantitative performance criteria under its current bailout program, according to brokerage Topline Securities, a development that could smooth the path for the lender’s upcoming review and the release of further funds.
The South Asian nation is likely to meet six out of seven of the benchmarks, known as QPCs, for the periods ending in September and December 2025, Topline said in a report released on Tuesday. Data for one indicator — the floor on targeted cash transfers — remains unavailable, though it was missed by just Rs1 billion in the previous review.
An IMF team is slated to arrive in Pakistan during the last week of February for the third review of the Extended Fund Facility and the second review of the Resilience and Sustainability Facility. The visit will scrutinize the country’s adherence to the assigned targets for those two quarters, with board approval potentially hinging on the outcomes. “QPC for any IMF program is an important criterion as it requires board-level waiver if not met,” Topline noted in its analysis.
Pakistan’s economy has been under strain from high inflation, a ballooning current-account deficit and depleted foreign reserves, prompting the government to secure a $7 billion IMF package last year. Meeting the Fund’s stringent conditions is critical for unlocking disbursements and maintaining investor confidence amid ongoing fiscal reforms. Based on Topline’s calculations, key metrics appear favorable. Net international reserves are projected to come in at around minus $6.7 billion for September 2025, beating the IMF’s floor target of minus $7 billion. For December 2025, the figure is expected to be about minus $6 billion, surpassing the benchmark of minus $6.5 billion.
The State Bank of Pakistan’s net domestic assets are forecast to range between Rs12.5 trillion and Rs13.5 trillion for both periods, well below the ceilings of Rs14.9 trillion to Rs15.1 trillion. Foreign currency swaps stood at $2.2 billion in September 2025 and $1.86 billion in December, compared with IMF caps of $2.25 billion and $2 billion, respectively. Primary budget surpluses also look solid, clocking in at Rs3.5 trillion for September and Rs4.1 trillion for December, far exceeding the targets of Rs460 billion and Rs3.2 trillion.
Topline’s channel checks indicate that government guarantees and the floor on cash transfer spending are on course to be achieved, as is the new target for tax returns. Still, challenges persist on the revenue front. The Federal Board of Revenue fell short of its tax collection goal by Rs336 billion, Topline said. While some of that gap might be bridged through collections tied to a court verdict on the Super Tax, overall inflows are expected to remain below the annual objective.
The IMF’s reviews come at a pivotal time for Prime Minister Shehbaz Sharif’s administration, which has implemented painful measures like hiking energy tariffs and tightening monetary policy to comply with the program. Success in this round could pave the way for additional support from bilateral creditors and multilateral institutions, helping to stabilize the rupee and rebuild reserves that hit a low of under $3 billion in early 2023. Pakistan’s gross domestic product is projected to grow by about 3.5% this fiscal year, up from 2.4% last year, though risks from geopolitical tensions and climate vulnerabilities loom large.
Topline’s optimistic assessment aligns with recent statements from Finance Minister Muhammad Aurangzeb, who has expressed confidence in meeting IMF commitments despite domestic political hurdles. The Fund’s board is expected to convene after the staff-level review, potentially approving the next tranche if all goes well. Failure to hit the QPCs could trigger negotiations for waivers, complicating the process.
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