IMF stresses Pakistan needs to strictly adhere to $7bn loan targets

The International Monetary Fund (IMF) has wrapped up its recent discussions with Pakistani authorities on economic issues, calling them positive.

According to a statement issued at the conclusion of the talks, held from November 12 to 15 under the leadership of IMF Mission Chief Nathan Porter, the discussions focused on reviewing the government's performance and strategies to ensure sustainable development.  

In the statement, Porter described the discussions as “constructive”, commending the Pakistani authorities for their encouraging and supportive attitude towards the negotiations. “We had constructive discussions with the authorities on their economic policy and reform efforts to reduce vulnerabilities and lay the basis for stronger and sustainable growth," he said in the statement. 

Porter mentioned that the IMF's mission engaged with both federal and provincial governments, State Bank officials, as well as private sector representatives.

The IMF stressed the need for Pakistan to strictly adhere to the targets outlined in the ongoing $7 billion loan program, which, he said, could significantly improve the living standards of the people. It said the Pakistan government is committed to increasing tax collection from non-taxpaying sectors to broaden the revenue base. 

Discussions also focused on enhancing the role of provinces in social security and development initiatives. "Shifting social and development responsibilities to provinces is inevitable," IMF mission chief said, adding that detailed discussion were held on the energy sector reforms and challenges in Pakistan. 

"Structural reforms in the energy sector are critical to restoring the sector's sustainability," he said further. The statement noted that the talks reviewed economic reforms, policies, and government performance for development. 

The IMF encouraged increasing the role for the private sector across various industries and limiting the role of the government in certain sectors. "Pakistan should take steps to reduce state intervention in economy and increase competitiveness." Porter stressed, adding that this would help develop a vibrant private sector. 

It reaffirmed its commitment to supporting Pakistan in laying the foundation for strong and sustainable growth by reducing vulnerabilities. The continuation of prudent fiscal and monetary policies was deemed essential.

Porter stated that the negotiations aimed to align reforms with long-term development goals, ensuring a vibrant private sector and a competitive economy. He also announced that the IMF delegation would revisit Pakistan in the first quarter of 2025 to continue this dialogue.  

The IMF Executive Board will soon be briefed on the outcomes of these discussions, which were part of the semi-annual review of Pakistan’s economic performance under the $7bn loan program.