Pakistan is set to undergo its first review of the $3 billion stand-by arrangement (SBA) under the International Monetary Fund’s (IMF) loan program, with a second tranche of $700 million in contention for disbursement.
A delegation from the IMF, led by Nathan Porter, is scheduled to arrive in Pakistan on November 2, according to official sources within the Finance Ministry. The review process is expected to extend until November 16.
The loan program, which amounts to $3 billion, has prompted a series of measures and reforms within Pakistan, and the IMF will now assess the country’s performance during the initial three months of the program.
The review process will be conducted in two phases. Initially, technical talks will involve an examination of economic data, as confirmed by sources familiar with the matter. Subsequently, the second phase will include policy-level discussions where new terms and conditions will be determined.
As part of the program, Pakistan has already implemented a series of stringent measures, including an increase in electricity and gas rates in accordance with the loan agreement. Additionally, efforts to reduce government expenditures and advance the privatization program are reportedly underway, signaling the country’s commitment to meeting the IMF’s conditions.
The Federal Board of Revenue (FBR) has also achieved tax collection that surpassed the set target during the first quarter of the current financial year, something that is seen as a positive indicator of Pakistan’s efforts to meet its fiscal responsibilities under the IMF program.
If the IMF is satisfied with Pakistan’s performance during the review, a second tranche of $700 million is expected to be disbursed. The successful outcome of the review will undoubtedly have far-reaching implications for the country’s economic stability and its ability to secure continued financial support from the crisis lender.
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