The International Monetary Fund’s Executive Board has convened for a crucial session, during which Pakistan is anticipated to receive approval for the next $1.2 billion installment under its current lending arrangement. This development comes after Pakistan reportedly fulfilled all the conditions stipulated in the IMF programme.
In a significant development, the Board is also expected to endorse the third review of Pakistan’s Extended Fund Facility (EFF) alongside the second review of the Resilience and Sustainability Facility (RSF), which emphasizes climate-related reforms. A staff-level agreement between Pakistan and the IMF was finalized on March 27, clearing the path for this upcoming disbursement.
Finance ministry officials have projected that petroleum levy collections will surpass the Rs1,468 billion target. Moreover, the government is contemplating further hikes in the levy as part of broader fiscal consolidation measures. The IMF continues to urge Pakistan to gradually eliminate subsidies, while the government highlights recent macroeconomic stabilization and a reduction in inflation as indicators of economic progress.
Despite these positive signs, officials caution that risks persist due to escalating geopolitical tensions in the Middle East. Nevertheless, Pakistan has reaffirmed its commitment to maintaining fiscal discipline to the IMF. The Board’s approval is expected to be a pivotal step toward unlocking much-needed external financing for Pakistan’s economy, which faces challenges from high debt servicing obligations and constrained foreign exchange reserves.
