Pakistan and the International Monetary Fund (IMF) have entered the policy-level phase of discussions regarding the country’s ongoing $7 billion loan programme, following the completion of technical talks.

The IMF delegation - led by Nathan Porter - met with Federal Finance Minister Muhammad Aurangzeb and his economic team, including Finance Secretary and Chairman of the Federal Board of Revenue (FBR), to assess Pakistan’s economic performance from July 2023 to February 2024.

The government has reiterated its commitment to adhering strictly to the conditions of the loan programme.

Policy-level talks underway

The discussions, expected to continue for two weeks, will focus on key fiscal indicators, revenue collection, tax and energy sector reforms, and the overall macroeconomic situation.

The review mission will present its recommendations to the IMF Executive Board, which is expected to make a decision on the release of the next $1.1 billion tranche by the end of March or early April.

Sources privy to the develeopment said Pakistan’s economic team has briefed the IMF delegation on macroeconomic stability, improvements in revenue collection, and progress in privatization efforts.

The delegation has been informed that the country’s exchange rate and foreign reserves have remained stable, while the fiscal deficit and primary balance have shown signs of improvement.

Briefings on economic indicators and reforms

Officials from the Economic Wing, Budget Wing, External Finance Wing, Regulations Wing, and DG Debt participated in the discussions. FBR Chairman Rashid Mahmood Langrial and his team provided an overview of revenue collection trends from July 2023 to January 2024.

The Ministry of Finance also submitted a report on the Green Initiative, detailing climate change projects undertaken by Pakistan in line with IMF recommendations. Sources indicate that PSDP spending and potential budgetary cuts were also discussed as part of the broader economic assessment.

The government has assured the IMF that it remains committed to the agreed economic reforms, particularly in taxation and energy sectors, to ensure compliance with the loan conditions.

Next steps in IMF review

Following the completion of the ongoing policy discussions, the IMF will finalize its recommendations for the Executive Board’s review.

The board’s decision will determine the disbursement of the next tranche of financial assistance and may influence policy measures, including adjustments to electricity prices.