The International Monetary Fund (IMF) conducted a briefing for European and American ambassadors on the progress of Pakistan’s current bailout package, extending discussions with authorities. The talks, originally planned to conclude on Monday, continued into their third day.
During the briefing, the IMF informed diplomats from various nations, including the United States, European Union, France, Italy, Germany, and Australia, about Pakistan’s achievements under the current $3 billion stand-by arrangement (SBA). While Pakistan showed intent to pursue another bailout program, details regarding the loan’s size and duration remained unclear.
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The IMF highlighted Pakistan’s progress in meeting program objectives but also pointed out challenges, notably low revenue collection, particularly by provinces, prompting a need to revisit the National Finance Commission (NFC) award. The NFC award distributes federal tax revenue to provinces, with concerns that provinces lack incentives to boost their own revenue sources.
Regarding fiscal measures, the IMF recommended enhancing revenue collection from real estate, construction, and retailers and urged the government to continue efforts to privatize state-owned enterprises (SOEs), including Pakistan International Airlines (PIA). The IMF also stressed the need to address inflation and maintain a tight monetary policy.
Separately, the US Ambassador Donald Blome met with Foreign Minister Ishaq Dar to discuss bilateral issues, including US support for economic reforms in Pakistan.
The IMF talks, initially scheduled from March 14 to 18, were extended for another day. Discussions included finalizing the Letter of Intent for the release and approval of the last loan tranche.
Additionally, the Ministry of Finance briefed the IMF on its pension reform plan, aiming to implement a new scheme from July. Proposed reforms include changes to pension calculation methods, commutation percentages, beneficiary lists, and rehiring policies.
