The International Monetary Fund (IMF) Executive Board is set to convene tomorrow in Washington, where it is widely expected to approve a substantial $2.3 billion financial package for Pakistan. This follows Islamabad’s fulfillment of most IMF-mandated reforms, paving the way for the disbursement of a $1 billion tranche along with an additional $1.3 billion in climate financing.
Ahead of the board meeting, Pakistan’s Ministry of Finance released a report detailing the federal government’s fiscal performance for the first nine months of the current financial year. The report revealed that Pakistan achieved a primary surplus of Rs3,468 billion, surpassing the IMF’s target of Rs2,700 billion, largely due to stringent fiscal measures and strong provincial surpluses.
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Despite the positive primary balance, the total fiscal deficit stood at Rs2,970 billion after factoring in a Rs1,053 billion provincial surplus. Punjab and Sindh led with the largest contributions to the surplus, helping ease the federal fiscal burden. However, high interest payments — which surged to Rs6,438 billion — continued to strain public finances, dwarfing allocations for development projects and other sectors.
While tax collections fell short of the target by Rs715 billion, non-tax revenues exceeded expectations, driven by a robust petroleum levy. As Pakistan awaits the IMF’s decision, the financial package is anticipated to provide much-needed relief and stability to the country’s economy.
