Pakistan Makes Headway with IMF, Meeting Most Loan Targets

Pakistan Makes Headway with IMF, Meeting Most Loan Targets

Pakistan has made significant progress in meeting the requirements set by the International Monetary Fund (IMF) for its ongoing loan program. Out of 26 conditions, the country has successfully achieved 25, according to inside sources.

The Ministry of Finance has prepared a detailed report confirming Pakistan’s compliance and has sent it to the IMF. Key achievements include:

  • Reduced Borrowing: Pakistan has followed the IMF’s guideline to limit borrowing from its central bank.
  • Timely Debt Payments: The nation has made all international loan payments as scheduled.
  • Cleared Backlogs: Tax refunds and overdue payments in the power sector have been settled.
  • No More Exemptions: The government has avoided offering tax breaks and exemptions.
  • Utility Price Hikes: Pakistan has increased electricity and gas prices as per IMF conditions.

The sources say Pakistan is confident it will complete the remaining requirement before the arrival of the IMF team in Islamabad.

Economic Outlook Remains Uncertain

Earlier this week, Fitch Ratings, a credit rating agency, cautioned that Pakistan’s recent elections and the resulting political uncertainty could complicate efforts to secure a new loan agreement with the IMF. The current IMF program expires in March 2024.

Analysts believe a new agreement is vital for Pakistan’s financial stability. While a successful deal is expected within a few months, any delay or failure to reach an agreement could put the country under severe economic pressure and increase the chances of a financial default.