Pakistan Briefs IMF on $7 Billion Loan Reform Agenda

Pakistan briefed the International Monetary Fund (IMF) on a $7 billion rescue reform agenda during an unscheduled visit to the IMF’s mission last week.

The mission held talks in Islamabad within six weeks of agreeing to fund the loan, an unusual move before the first review scheduled for the first quarter of 2025.

The IMF announced on Friday that it had decided to present the results of its unscheduled visit to Pakistan to its executive board for decision-making, citing delays in the implementation of the $7 billion program.

An IMF team led by mission chief Nathan Porter visited Pakistan on an emergency from Nov. 11-15 to assess progress on some 40 conditions the government has agreed to implement.

Through a press release, the IMF shared its “preliminary findings,” stating that a detailed report will be presented to the Executive Board for further deliberations.

According to the head of the mission, Pakistan and IMF staff announced in a statement: “We agreed on the need to pursue prudent fiscal and monetary policies, and to mobilize revenues from unused tax bases, while transferring greater social and development responsibilities to the provinces.”

In addition, structural energy reforms are critical to restoring the sector’s viability, and Pakistan should take steps to limit state intervention in the economy and promote competition, which would help promote the dynamic development of the private sector, the statement noted. The implementation of the strong program could create a more prosperous and inclusive Pakistan, and improve the living standards of all Pakistanis.

As part of the IMF’s requirements, the federal government and the four provinces were scheduled to sign a national financial charter by September 30. While the agreement was finalized, it ruled out the transfer of the Binazir Income Support Program (BISP) to the provinces, resulting in a miniature version of the agreement.

The first audit mission to facilitate the expanded fund is expected in the first quarter of 2025.