IMF terms $7bn loan programme implementation ‘strong’ as review comes to an end – Business

At the end of Friday, the International Monetary Fund (IMF) described the implementation of Pakistan’s $ 7 billion expansion fund facility (EFF) as “strong” as it estimated it during a recent visit to the country.

The statement came a few hours later in Pakistan and the IMF on a positive note after taking the first two -year review of the Billion 7 billion loan program, without imposing additional measures of additional taxes.

Instead, the government pledged to maintain financial goals through the cost control, especially through the development program.

At the end of the mission DescriptionMission Chief Nathan Porter said: “The implementation of the program has been strong, and there has been considerable progress in these discussions in several sectors, which has planned to reduce the reduction of low inflation, to improve the stability of the energy sector, to improve the stability of the energy sector.

The statement recalled that a team from the IMF, under the leadership of Porter, visited Pakistan from February 24 to March 14.

The fund states that it discussed the first review of the loan program in collaboration with the EFF and possible new arrangements under the IMF’s flexibility and stability (RSF).

“The IMF and Pakistani authorities made significant progress to reach the staff level agreement (SLA) on the first review under the expansion of the expansion Fund Facility (EFF) under the expansion Fund Facility (EFF),” said the porter said.

He added that the implementation of Pakistan’s structural reform agenda to accelerate development, while stabilizing social security and reconstruction of health and education costs, was a positive conversation.

On the possible management under the RSF, the Porter noted that “the authorities’ climate reform agenda has also been discussed, which aims to reduce the risks of natural disasters, and reform.”

A separate technical mission from the IMF visited the country last month on request of more than $ 1 billion in additional funding for Pakistan’s climate resilience.

The IMF official added, “Missions and authorities will continue to do policy debates in the coming days to finalize these debates.”

He extended the definition of the fund to “Pakistani authorities, private sector, and development partners” to have fruitful dialogue and their hospitality during this mission.

In July 2024, Pakistan and the IMF reached a three -year, $ 7 billion relief package agreement, in which the new program prepared the country to “cease economic stability and create conditions for strong, more comprehensive and flexible growth”.

The 37 -month -old EFF program consists of six studies about bailout life, and the next installment of about $ 1 billion will be permanent on the success of the performance review.

‘IMF Mission appreciates overall performance’

Were official sources It confirmed that the draft of Memorandum of Economic and Financial Policy (MEFP) is still being finalized before the SLA’s formal announcement. This will be the approval of the IMF’s Executive Board for the supply of about $ 1.1 billion by earlier next month.

Officials said the most difficult aspect of two weeks of engagements related to gas rates for industrial captive power plants, but a resolution reached a resolution to satisfy the IMF delegation.

The approval of the law was also considered an important step for introducing agriculture income tax through all four provincial assemblies, and both parties agreed that much need to be done on the ground for effective recovery that began next year’s budget.

The two sides will be busy in the next two months to deal with technical and procedure hiccups in aligning four provinces.

The revised macroeconomic indicators, especially GDP growth estimates, estimates more than 600 billion in federal tax collection estimates. The original budget projection of Rs 1.29 trillion is now adjusted to 1.23TR.

Officials said that the mission of the IMF staff appreciated the overall performance on the benchmarks and the goals, but not without emphasizing a better reservoir than the retail and wholesale sectors, where authorities have yet to struggle to meet the targets.

The fund team demanded better collection of property from the unmanned sectors. The Federal Board of Revenue (FBR) reaffirmed its proposal to facilitate tax on real estate sector for better recovery. The two sides can discuss it further in the run -up in next year’s budget.

The second quarter estimates for the GDP resulted in a revision of the economy, which resulted in the budget estimated at about 1116TR this year in the budget 2024-25. Less inflation and economic growth were considered to be a legitimate factory for reduction of tariffs, but it is still in the goals of GDP ratio.

Informed sources said that both sides will practice practically to finalize the MEFP and SLA, and then for next year’s budget consultation.

Sources highlighted that for the first time compared to past program studies, the power sector has also met its goals on the back of high base tariffs, low rates, stable currency, etc., though technical losses and inadequate recovery have disturbed the IMF mission.

The IMF also emphasized on improving the track and trace system in the sectors and the increase in the implementation of the Point of Cell (POS) system in commercial activities. It also called for strong efforts to privatize the power distribution companies and Pakistan International Airlines.