Talks with visiting IMF delegation going in ‘right direction’: Pak Finance Minister

Islamabad, Oct 1 (PTI) Pakistan’s Finance Minister Muhammad Aurangzeb on Wednesday said that talks with the visiting International Monetary Fund delegation were going in the “right direction”.

The donor is reviewing the progress on the conditions attached with the USD 7.1 billion Extended Fund Facility (EFF) and the USD 1.1 billion Resilience and Sustainability Facility (RSF) loans already granted to Pakistan.

The former loan was agreed last year to bring micro-economic stability in Pakistan, while the second loan agreed this year aims to address the climatic vulnerability of the country.    An IMF team mission led by Iva Petrova held a formal kick-off meeting with the economic team of Pakistan to review the implementation of the EFF and RSF. The review focuses on performance as of the end of June this year.

Aurangzeb spoke to reporters that both the EFF and the RSF were being reviewed. “So far, so good,” he said, Dawn reported on Wednesday.

The EFF is undergoing its second review, while the RSF is being reviewed for the first time.

When asked about the reviews and whether they will conclude by October 8, Aurangzeb said: “Whatever discussions are happening, they are moving in the right direction.” Additionally, Aurangzeb also spoke about the Federal Board of Revenue (FBR) recording a shortfall of PKR 198 billion in the first quarter of the fiscal year.

“We want to get FBR tax to gross domestic product (GDP) of 11 per cent by the end of this fiscal year,” he said. “We want to remain very committed to that target. As you know, there are certain pending court cases … let’s see how the court decides and that can help bridge some of this gap.” Pakistan and the IMF reached a three-year, USD 7 billion aid package deal in July last year, giving much-needed respite to the nation. The new programme aimed to enable Pakistan to “cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth”.

In May this year, the IMF board approved a fresh USD 1.4 billion loan to help Pakistan strengthen its economic resilience to climate vulnerabilities and natural disasters. However, the disbursement of funds is contingent upon successful completion of reviews under the EFF, an IMF official said.

The opening session of the IMF talks, which kicked off on Monday, was attended by key economic stakeholders, including the State Bank of Pakistan governor, finance secretary and chairman of the Federal Board of Revenue (FBR).

While power sector benchmarks for the end-June 2025 period were comfortably met, revenue collection fell short by about Rs1.2 trillion — almost 1pc of GDP — in the last fiscal year, and the first two months of the current fiscal year have shown similar shortfalls.

The mission will remain in Pakistan for almost two weeks and will also hold forward-looking discussions with the authorities to push for faster implementation of the end-December 2025 targets. Upon the successful completion of the review, Pakistan will be eligible for the disbursement of about USD 1 billion (760 million Special Drawing Rights) by the end of next month, Dawn reported. PTI SH   RD RD