ISLAMABAD: Pakistan is on course to secure more than $1 billion from the International Monetary Fund (IMF) under the Extended Fund Facility, despite clear revenue slippages and missed provincial commitments. The third tranche is expected to be released following the completion of policy-level talks in the coming days.
Sources reveal that technical negotiations have concluded successfully, with the IMF acknowledging Pakistan’s progress in key areas. The government has shown notable improvement in the power sector, where recovery efforts and steps to curb circular debt have strengthened its position. Adjustments in fiscal allocations, including reduced subsidies and restrained borrowing, have also been recognised as positive measures.
However, the IMF review has flagged concerns over revenue shortfalls. The Federal Board of Revenue (FBR) fell short of its June targets by over Rs 200 billion, while provinces such as Punjab and Sindh could not deliver the agreed budget surpluses. These weaknesses mean the government will have to adopt additional taxation measures and policy adjustments to bridge the gaps.
Finance Minister Muhammad Aurangzeb is expected to finalise discussions with the IMF mission between October 9 and 10, with a few waivers likely to be sought to cover missed targets. If successful, Pakistan could see disbursement of the tranche by early November, subject to IMF Board approval.
For Pakistan, the release of funds will be crucial not only for stabilising reserves but also for maintaining investor confidence at a time when economic pressure points — including provincial compliance, state-owned enterprise reforms, and new taxation initiatives — continue to challenge fiscal management.
This story has been reported by PakTribune. All rights reserved.