Policy-Level Talks Underway
Pakistan and the International Monetary Fund (IMF) have commenced policy-level discussions as part of the ongoing review of the country’s $7 billion loan programme. This phase follows the completion of technical-level talks and is expected to span two weeks.
An IMF delegation, led by Nathan Porter, met with Federal Finance Minister Muhammad Aurangzeb and key officials, including the Finance Secretary and Chairman of the Federal Board of Revenue (FBR). The primary focus of the discussions will be on fiscal indicators, revenue collection, taxation, energy sector reforms, and the overall macroeconomic situation.
The government has reaffirmed its commitment to adhering to IMF-imposed conditions, aiming to secure the timely release of the next tranche of $1.1 billion. The IMF Executive Board is expected to review the findings and make a decision by late March or early April.
Economic Performance and Reforms Under Review
Sources familiar with the discussions have reported that Pakistan’s economic team has provided the IMF delegation with updates on the country’s macroeconomic stability, revenue growth, and privatization progress. Officials have emphasized that:
- The exchange rate and foreign reserves have remained stable.
- The fiscal deficit and primary balance have shown signs of improvement.
- Revenue collection from July 2023 to January 2024 has strengthened.
Representatives from the Economic Wing, Budget Wing, External Finance Wing, Regulations Wing, and DG Debt have actively participated in the talks. Additionally, FBR Chairman Rashid Mahmood Langrial and his team have outlined revenue collection trends.
IMF Recommendations and Future Policy Measures
The Ministry of Finance has also submitted a report detailing Pakistan’s Green Initiative, highlighting climate-related projects in line with IMF recommendations. Additionally, discussions have touched upon the Public Sector Development Program (PSDP) and potential budgetary cuts as part of broader economic assessments.
Following the conclusion of the policy discussions, the IMF will finalize its recommendations, which will be submitted to the Executive Board. The board’s decision will determine the disbursement of the next tranche of financial aid and may lead to further policy adjustments, including possible increases in electricity prices.
