Islamabad (TDI): Pakistan and the International Monetary Fund (IMF) have made progress towards a staff level agreement, as the IMF said the country’s macroeconomic review showed promise.
During a review mission that ran from September 24 to October 8, IMF representatives led by Iva Petrova held intensive discussions with Pakistani authorities across Karachi and Islamabad.
These discussions were part of the second review under the 37‑month Extended Fund Facility (EFF) and the first review under the Resilience and Sustainability Facility (RSF).
In a statement marking the close of the talks, the IMF noted that “significant progress” had been achieved in a number of difficult areas.
These contentious areas included upholding fiscal consolidation while funding essential flood relief, preserving inflation control through disciplined monetary policy, restoring the solvency of the energy sector with tariff adjustments and cost‑cutting reforms.
The two sides also made headway on the IMF’s climate resilience agenda under RSF, with “productive discussions” on reform steps already undertaken by the government.
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Some issues still remain unresolved though, like the IMF’s demand for Cabinet approval of the elimination or tightening of three tax/levy schemes before the month ends.
So far, consensus has been reached to axe two such schemes including baggage rules and gift scheme for importing cars, while tightening the “Transfer of Residence” scheme by restricting vehicle imports only to individuals who have lived abroad for at least a year has also been agreed.
Another sticking point lies in the release of the GCD (governance, corruption, and disclosure) Assessment report.
The Pakistani government has convened a task force to review anti‑corruption legislation, propose amendments to the Civil Servants Act to enable disclosure of assets, modify the Elections Act to require non‑elected advisers’ asset statements, and harmonize mandates across agencies such as NAB, FIA, and provincial constituencies.
If the IMF board gives a green signal after this extensive review, Pakistan will be able to unlock another tranche from the total agreed upon roll out.
Established in December 2008, The Diplomatic Insight is Pakistan’s premier diplomacy and foreign affairs magazine, available in both digital and print formats.
