Pakistan Met All Financial Targets Under IMF’s Stand-By Agreement

The Pakistani authorities’ overall performance against end-December quantitative performance criteria (QPCs), Indicative Targets (ITs), and Structural Benchmarks (SBs) under the Stand-By Arrangement (SBA) was satisfactory, says the International Monetary Fund (IMF).

The Fund in its report titled ” Second and final review under the SBA”, stated that the authorities met all seven quantitative Performance Criteria (PCs) for end-December 2023. This includes:

1. The floors on net international reserves of the SBP.
2. Targeted cash transfer spending.
3. The ceilings on net domestic assets of the SBP.
4. The SBP’s FX swap/forward book.
5. Net government budgetary borrowing from the SBP.
6. The general government’s primary budget deficit.
7. Government guarantees.

They also met both continuous PCs on zero new flow of SBP credit to the government, and zero external public payment arrears.

The authorities also met all four ITs for end-December 2023:

1. The floors on budgetary health and education spending
2. FBR net tax revenues.
3. The ceilings on the net accumulation of tax refund arrears.
4. Power sector payment arrears.

The Structural Benchmarks were met as well:

1. The BISP inflation adjustment.
2. Notification of the semiannual gas tariff adjustment determination.
3. The development of a plan to strengthen the SBP’s internal control systems in lending operations.
4. Not granting further tax amnesties.
5. Avoiding new preferential tax treatments or exemptions.
6. Maintaining an average premium of no more than 1.25% between the interbank and open market rates.

Work toward amending four dedicated SOE laws (missed SB, end-November 2023) was not met but remains in progress to align legislation with requirements; the timing of its passage is contingent on the recently seated National Assembly.

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