IMF team to visit Pakistan in first week of March for crucial economic review

The International Monetary Fund (IMF) review mission is set to visit Pakistan in the first week of March to assess progress under the $7 billion Extended Fund Facility (EFF). 

The review is considered crucial as Islamabad will have to seek waivers for unmet conditions and negotiate the framework for the 2025-26 federal budget with the IMF staff.

Pakistan has faced slow disbursement of foreign loans, receiving $4.5 billion in the first seven months (July–January) of FY2024-25, compared to $6.7 billion in the same period last year. After including IMF disbursements, total inflows reached $5.5 billion, still significantly below the projected $19 billion for the fiscal year. 

The IMF’s first review and approval of a $1 billion tranche is expected in April 2025, but failure to reach a consensus may link its release to parliamentary approval of the budget.

The IMF review comes amid a shift in Pakistan’s current account from surplus to deficit, with a $420 million shortfall in January 2025. 

Pakistan is likely to seek waivers for missing deadlines on implementing an Agriculture Income Tax (AIT), despite approval from all four provincial assemblies.

Additionally, legislative work on the Wealth Fund and Asset Declaration Scheme remains incomplete. The Tajir Dost Scheme (TDS) failed to generate expected results, though the Federal Board of Revenue (FBR) reported a rise in tax returns filed by retailers.