Pakistan is “likely to pass” the ongoing first review of its $7 billion Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF), Bloomberg reported citing officials and diplomats familiar with the matter.
The report said that the country has made enough progress to raise revenue.
As per the report, Pakistan has taken key steps, including “approved a law to tax agricultural income, attempted to sell a stake in state-owned Pakistan International Airlines (PIA) and taken steps to meet an ambitious tax target, and have presented these developments to the IMF”.
It noted that the IMF office in Islamabad and the Ministry of Finance didn’t respond to a request for comment.
Islamabad secured the $7 billion EFF last summer to help claw its way out of an economic crisis, with an immediate disbursement of about $1 billion.
The review, if cleared and approved by the lender’s board, could unlock another tranche of funding for cash-strapped Pakistan ahead of its annual budget which is usually presented in June.
The programme has played a key role in stabilising Pakistan’s economy and the government has said the country is on course for a long-term recovery.
On Tuesday, Finance Minister Muhammad Aurangzeb told Reuters that Pakistan was “well positioned” for the first review of its IMF’s bailout programme as talks with the global lender began.
“They are here. We will have two rounds of talks, first technical and then policy level,” Finance Minister Muhammad Aurangzeb said.
“I think we are well positioned” for the review, he said.
On Wednesday, media reported that the Pakistani authorities during their meeting with IMF mission led by Nathan Porter on Tuesday reiterated their commitment to adhere to the agreed economic reforms and fiscal discipline under the EFF programme.
As per the report, the government has assured the IMF team that it remains committed to the agreed economic reforms, particularly with respect to taxation and energy, and will ensure compliance with the loan conditions.
Sources revealed that the Fund team was also briefed on fiscal deficit, revenue collection, provincial surplus and primary surplus. Pakistan will submit a report on the implementation of all conditions set by the IMF under the $7 billion loan programme and a report on the first half of the current fiscal year, officials added.
Following the completion of the ongoing discussions, the IMF staff will finalize its recommendations for the Executive Board’s review, a prerequisite for Board approval for the release of the one billion dollar tranche.
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