ISLAMABAD: Pakistan is expected to successfully complete the first review of its $7 billion loan program with the International Monetary Fund (IMF), according to officials and diplomats cited by Bloomberg.
The country has reportedly made significant strides in boosting revenue, which has been a key condition for the loan program.
Last summer, Islamabad secured the $7 billion Extended Fund Facility (EFF) to help address its ongoing economic crisis. This programme has played a pivotal role in stabilizing Pakistan’s economy, with the government expressing confidence that it is on track for long-term recovery.
According to reports, the government, led by Prime Minister Shehbaz Sharif, has taken several important steps, including approving a law to tax agricultural income, attempting to sell a stake in the state-owned Pakistan International Airlines, and implementing measures to meet an ambitious tax target. These actions have been presented to the IMF as part of the ongoing discussions, though the officials involved requested anonymity due to the confidential nature of the talks.
An IMF delegation, led by Mission Chief to Pakistan Nathan Porter, is currently in Islamabad to meet with government officials and assess progress on meeting the conditions outlined in the loan agreement.
If the IMF approves the first review, Pakistan is set to receive around $1 billion as the second installment of the loan package. The review is being closely monitored by investors as a key indicator of Pakistan’s progress in implementing economic reforms.
Prime Minister Shehbaz Sharif recently told IMF Managing Director Kristalina Georgieva that his government plans to submit a detailed plan for boosting economic growth once stability is achieved. The IMF chief expressed encouragement over Pakistan’s commitment to reform, noting the country’s efforts to meet the loan conditions.
Finance Minister Muhammad Aurangzeb also expressed confidence, stating that Pakistan is “well positioned” for the first review of the $7 billion loan package. He mentioned that discussions with the IMF had started with technical talks and would move to policy-level talks.
The Finance Minister further assured that Pakistan will meet its revenue goals for the fiscal year ending in June, with any shortfall being addressed by expanding the tax net. He also reaffirmed the country’s commitment to meeting other targets outlined in the program.
Pakistan’s relationship with the IMF has been historically challenging, with previous loan programs either ending prematurely or delayed due to unmet conditions. However, the successful completion of a short-term, nine-month programme last year has helped build some trust between Pakistan and the IMF.
