IMF review mission set to visit Pakistan in first week of March

• Govt to evolve consensus on key contours of next budget.
• Completion of review might be linked to budget's approval.
• Country might have to seek wavier on certain conditions.
  

ISLAMABAD: The review mission of the International Monetary Fund (IMF) is set to visit Pakistan in the first week of the next month for holding review parleys under the $7 billion Extended Fund Facility (EFF), The News reported on Wednesday.

The smooth sailing of the first review of IMF sponsored programme is considered quite crucial, as Islamabad will have to seek waivers on the unfulfillment of certain conditionalities.

Prime Minister Shehbaz Sharif-led government secured the approval of IMF's Executive Board for the fresh loan programme in September 2024 which was followed by the disbursement of a $1.02 billion tranche.

With IMF officials in Pakistan, Islamabad will also have to evolve a broader consensus on the major contours of the next budget for 2025-26 with the lender's staff.

If both sides fail to evolve consensus, completion of the first review might be linked with approval of the budget from the parliament.

As agreed, the first review and approval of a $1 billion tranche by the Executive Board of IMF is scheduled to be done by April 2025.

Disbursement of foreign loans for Pakistan stood at $4.5 billion in the first seven months (July-Jan) of the current fiscal year 2024-25 against $6.7 billion in the same period of last year. After incorporating the IMF loan amount, the total disbursement of foreign loans went up to $5.5 billion.

However, it remained less than the projected loan inflows of $19 billion for the whole current financial year.

The IMF review mission is expected to visit Islamabad from March 4 at a time when the current account has turned from surplus to a deficit month-on-month (MoM) basis, as it posted a deficit of $420 million in January 2025.

"Yes, the IMF review mission will be visiting Islamabad in the first week of March," one top official of the finance ministry confirmed when publication sought his comments on Tuesday.

Sources said Pakistan might have to seek a waiver for missing out deadline on getting approval on Agriculture Income Tax (AIT).

Although four provincial assemblies granted their assent, the deadline could not be materialised. The Wealth Fund and Asset Declaration Scheme-related legislation could not be done so far.

The Tajir Dost Scheme (TDS) could not bring desired results. The Federal Bureau of Revenue (FBR) claimed an increased number of retailers filed their tax returns during the current fiscal year.

Foreign loan disbursements

Pakistan has fetched dollar loan inflows of $4.584 billion during the first seven months of the current fiscal year.

The multilateral creditors disbursed $2.32 billion in the first seven months, out of which the Asian Development Bank (ADB) remained the largest partner. Manila-based lender disbursed loans of $1.04 billion.

China’s commercial bank disbursed $306 million, AIIB $60.22 million, EIB $10.53 million, World Bank’s IDA $573.8 million, WB’s IBRD $201.5 million, IsDB $265.72 million, IsDB $134.19 million and OPEC Fund $14 million.

All the bilateral creditors disbursed $329.1 million in the first seven months of the current fiscal year, out of which China provided $99.17 million, France $102.5 million, Germany $26.09 million, Japan $12.7 million, Korea $24.4 million, Saudi Arabia $12.37 and the US $40.05 million.

Pakistan could not launch any international bond, as it had projected to fetch $1 billion.

However, the government was able to secure a commercial loan of $500 million. Through the Naya Pakistan Certificate, the government so far generated $1.126 billion in the first seven months of the current fiscal year.