Pakistan-IMF Talks Begin Today to Unlock $1.2 Billion Loan
Pakistan and the International Monetary Fund (IMF) are set to begin formal negotiations today for the fourth review of the $7 billion Extended Fund Facility and the third review of the Resilience and Sustainability Facility, with successful completion potentially unlocking about $1.2 billion in new financing.
The IMF staff mission, led by Iva Petrova, is expected to remain in Pakistan for nearly two weeks, with discussions continuing into the first week of October. The reviews are part of Pakistan’s 37 month IMF program aimed at stabilizing the economy through fiscal discipline, structural reforms and measures to support long term growth.
If both reviews are completed successfully, Pakistan could receive about $1 billion under the EFF and another $200 million under the RSF by the end of November or early December.
The negotiations will cover several areas of the IMF program. Pakistani authorities are expected to brief the Fund on the Sovereign Wealth Fund, efforts to reduce circular debt, the reasons for not fully deregulating the sugar sector, the current account balance, the primary surplus, foreign exchange reserves and the exchange rate.
Discussions between the IMF and the Federal Board of Revenue will focus on expanding the tax base and implementing tax reforms, while the provinces will discuss measures to improve tax and non tax revenue collection.
The National Accountability Bureau and the Federal Investigation Agency are also expected to brief the IMF on measures to prevent money laundering and terrorist financing.
The Ministry of Energy will provide an update on circular debt and sector reforms, while other discussions will cover the implementation of conditions under the ongoing IMF program.
The talks come as Pakistan continues to work through several outstanding IMF conditions. The government has previously said implementation of the overall program remains strong, although some conditions related to areas including sugar sector liberalization, health and education spending and other structural reforms have not been fully met.
