Finance Minister Muhammad Aurangzeb announced on Tuesday that Pakistan has begun discussions with the International Monetary Fund (IMF) for the first biannual review of its $7 billion loan program. He expressed confidence that the country is in a strong position for the evaluation.
Pakistan entered into a three-year agreement with the IMF in July, securing financial assistance to enhance macroeconomic stability and promote sustainable growth.
A nine-member IMF team has arrived to assess Pakistan’s progress under the Extended Fund Facility (EFF). According to Aurangzeb, “They are here. We will have two rounds of discussions—first at the technical level, followed by policy-level talks.” He emphasized that Pakistan is well-prepared for the review.
Led by Nathan Porter, the IMF delegation will hold discussions with Pakistani authorities from March 3 to 14, focusing on the country’s fiscal performance, economic reforms, and adherence to financial targets outlined in the 37-month agreement.
A senior government official involved in the review preparations acknowledged minor technical delays in meeting certain deadlines. However, he noted that these issues had been resolved within weeks or a month.
The EFF program consists of six reviews over its duration, with the disbursement of the next $1 billion tranche contingent on a successful evaluation.
One of the key conditions of the program is improving Pakistan’s tax-to-GDP ratio, a crucial factor in maintaining economic stability and managing debt. In 2024, salaried individuals became the third-largest contributors to income tax, following banks and petroleum, surpassing the textile sector.
The outcome of the ongoing discussions will determine whether Pakistan qualifies for further financial assistance and how effectively it has implemented the necessary economic reforms.
