Pakistan Confident in IMF Review. $1.1B Tranche Expected Soon

The government remains confident about securing a positive verdict in the International Monetary Fund’s (IMF) initial assessment, which will unlock a $1.1 billion disbursement as part of the $7 billion Extended Fund Facility (EFF).

An IMF delegation, led by Nathan Porter, will engage in policy talks with Pakistani officials from March 3 to 14, reviewing economic performance indicators such as tax collection, budgetary policies, and financial restructuring.

While some compliance delays were initially acknowledged, authorities confirm that all fiscal targets have now been achieved. The review primarily examines the first six months of FY 2024 (July-December), where a revenue shortfall was noted. However, unexpectedly high earnings from non-tax avenues—including central bank surpluses, petroleum levies, and telecom sector contributions—have helped bridge the gap.

Despite subpar agricultural output (notably in cotton and wheat) and sluggish industrial growth, Pakistan has restructured its debt repayment strategy, extending obligations beyond 39 months—a key reform urged by the IMF to enhance fiscal resilience.

The government is now expanding its tax net, focusing on retail, real estate, and agricultural incomes to align with IMF directives.

Additionally, structural adjustments are progressing, such as amending the Civil Servants Act (1973), mandating public officials (BPS 17-22) to disclose their assets digitally, including overseas holdings.

The Planning Ministry has revised PSDP project selection criteria, prioritizing strategic infrastructure, foreign-backed initiatives, and climate-friendly developments to ensure fiscal responsibility and curb unnecessary spending.

With 16 out of 17 IMF-mandated reforms already implemented, the government anticipates a seamless review process, paving the way for the $1.1 billion payout within three weeks.