Pakistan accomplishes 25 of 26 targets set by IMF for second review

Tax refunds issued, energy prices raised, no loans from SBP taken, and foreign repayments made on time

Pakistan has met 25 of the 26 targets the International Monetary Fund (IMF) set for its second review under the Standby Agreement (SBA), which is due to expire in March 2024. 

According to a report compiled by the Ministry of Finance, Pakistan has achieved 25 targets of the international lender, the sources said and added that a report has been dispatched to the IMF.

The country adhered to the IMF’s stipulation of not procuring loans from the State Bank of Pakistan and ensuring timely repayment of international debts.

Pakistan made substantial debt and interest payments totaling $7.3 billion during the first half of the fiscal year 2024 (1HFY24), ending on December 31, 2023.

Additionally, the government successfully managed to issue tax refunds and settle outstanding payments in the power sector as per schedule. It also complied with the IMF’s requirements of not offering tax amnesties or exemptions.

The condition to jack up electricity and gas prices was also met. Pakistan is optimistic about completing the remaining target before the IMF team arrives in Islamabad, the sources said.

Earlier this week, Fitch Ratings said that the close outcome of Pakistan’s election and resulting near-term political uncertainty may complicate the country’s efforts to secure a financing agreement with the IMF.

The credit rating agency stated that a new deal is key to the country’s credit profile, and we assume one will be achieved within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default.

Pakistan’s 9-month SBA was approved by the IMF’s Executive Board on July 12, 2023, in the amount of SDR 2.250 billion (about $3 billion at the time of approval), aimed to provide a policy anchor for addressing domestic and external balances and a framework for financial support from multilateral and bilateral partners.


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