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ISLAMABAD: Pakistan&rsquo;s finance ministry has clarified that the structural benchmarks recently highlighted under Pakistan&rsquo;s IMF Extended Fund Facility (EFF) are part of a phased, medium-term reform agenda previously agreed with the Fund, and do not constitute new or abrupt conditions.&nbsp;In a statement on Sunday, the ministry said the measures build on reforms already initiated by the government and are implemented in a sequenced, step-by-step manner to achieve the program&rsquo;s policy objectives. It emphasized that the Memorandum of Economic and Financial Policies (MEFP) finalized after the EFF&rsquo;s Second Review supplements the earlier MEFP, ensuring continuity and deepening of Pakistan&rsquo;s reform agenda.&nbsp;According to the statement, the benchmarks cover multiple sectors, including fiscal management, governance, financial markets, state-owned enterprises, energy, trade, and corporate regulation.&nbsp;Key measures include enhancing the transparency of civil servants&rsquo; asset declarations, strengthening the operational effectiveness of the National Accountability Bureau, empowering provincial anti-corruption bodies with access to financial intelligence, and improving remittance flows by addressing bottlenecks in cross-border payments.&nbsp;The ministry also highlighted reforms in financial markets, including a comprehensive study of the local currency bond market to broaden the investor base, as well as a reform roadmap for the Federal Board of Revenue, operationalization of the Tax Policy Office, and preparation of a medium-term (3-5 year) tax strategy to enhance revenue predictability and administration.&nbsp;On energy and state-owned enterprises, it cited the ongoing privatization of selected power distribution companies, preconditions for private-sector participation in HESCO and SEPCO, and the signing of Public Service Obligation (PSO) agreements with major entities.&nbsp;In trade and commodity markets, deregulation of the sugar sector aims to reduce price distortions and liberalize operations. At the same time, corporate and regulatory reforms seek to strengthen governance, compliance for unlisted firms, and efficiency in special economic zones. Contingency measures, including a Federal Excise Duty on fertilizer and pesticides, remain part of the program framework.&nbsp;The ministry noted that the IMF&rsquo;s Second Review report confirmed eight of 13 prior benchmarks had been met, including approval of the FY26 budget in line with program targets, implementation of the new agricultural income tax, and amendments to improve asset disclosures. Some benchmarks were delayed due to ongoing reforms and recent floods, and the authorities have requested that their deadlines be reset while emphasizing that overall progress remains on track.&nbsp;The finance ministry concluded that the phased approach ensures reforms are sustainable, sequenced, and aligned with Pakistan&rsquo;s medium-term economic priorities, reiterating that the EFF&rsquo;s structural benchmarks support the government&rsquo;s own reform agenda rather than imposing externally driven conditions.

Economy

 The benchmarks cover multiple sectors, including fiscal management, governance, financial markets, state-owned enterprises, energy, trade, and corporate regulation.

Pakistan says IMF benchmarks part of ongoing reform agenda

ISLAMABAD: Pakistan&rsquo;s Federal Minister for Finance and Revenue Muhammad Aurangzeb has observed that &ldquo;improved macroeconomic fundamentals have enabled Pakistan to regain access to international commercial markets after more than two years.&rdquo; Aurangzeb, in an interview with CGTN America (China Global Television Network) during his visit to Washington DC for the IMF-World Bank Annual Meetings, outlined Pakistan&rsquo;s continuing progress on macroeconomic stabilization, structural reforms, and growth-oriented policy measures, said a press release issued by Pakistan&rsquo;s Finance Division on Wednesday. <div class="fr-embed"><div class="twitter-tweet twitter-tweet-rendered" style="display: flex; max-width: 550px; width: 100%; margin-top: 10px; margin-bottom: 10px;"><iframe id="twitter-widget-0" scrolling="no" frameborder="0" allowfullscreen="true" style="position: static; visibility: visible; width: 550px; height: 585px; display: block; flex-grow: 1;" title="X Post" src="https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=1980874049086529583&lang=en&origin=https%3A%2F%2Fmain.d1wrm1qseko1cp.amplifyapp.com%2Farticles%2F&sessionId=18d9926d3d3369db3b05cd5b23637d87fea6e65e&theme=light&widgetsVersion=2615f7e52b7e0%3A1702314776716&width=550px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</iframe></div></div> The minister noted that over the past year, Pakistan&rsquo;s economy has achieved notable consolidation in macroeconomic indicators. &ldquo;Fiscal and external accounts have stabilized, the exchange rate has remained steady, and foreign exchange reserves have increased to 2.5 months of import cover,&rdquo; Aurangzeb stated. He noted that &ldquo;inflation has returned to single digits, the policy rate has been reduced by half, and all major global rating agencies, including Fitch, S&amp;P, and Moody&rsquo;s, have upgraded Pakistan&rsquo;s outlook for the first time in nearly three years.&rdquo; Growth forecast&nbsp;The finance minister informed that the second review under the International Monetary Fund (IMF)&rsquo;s Extended Fund Facility had recently been completed in Islamabad, resulting in a staff-level agreement. The Fund&rsquo;s management has expressed continued confidence in Pakistan&rsquo;s reform agenda, which remains focused on structural adjustments in taxation, energy, public finance, and privatization, he said, according to the press release. The IMF has raised Pakistan&rsquo;s economic growth forecast to 3.6% for the current fiscal year, exceeding the World Bank&rsquo;s 2.6% estimate, while cautioning of possible higher inflation and current account deficit. The IMF states, &ldquo;the severe flooding in Pakistan during the third quarter of 2025 may have more adverse effects on growth, inflation, and the current account than currently estimated, although these impacts remain highly uncertain,&rdquo; making the figures provisional.&nbsp;Revival of privatization programThe finance minister highlighted the revival of the privatization program, noting the successful completion of the first transaction of the current fiscal year involving the sale of a small bank to a UAE-based conglomerate, with additional investment planned in digital expansion, the Finance Division&rsquo;s press release said. &ldquo;The privatization of the national airline is also expected to be finalized before the end of the fiscal year,&rdquo; Aurangzeb said. He observed that &ldquo;improved macroeconomic fundamentals have enabled Pakistan to regain access to international commercial markets after more than two years.&rdquo; &ldquo;The government has recently secured borrowing from Middle Eastern banks and is preparing to issue the country&rsquo;s inaugural Panda Bond before the end of the year,&rdquo; Aurangzeb said. He added that &ldquo;Pakistan had smoothly repaid a $500 million Eurobond in September and is well positioned to meet the next $1.3 billion repayment due in April 2026.&rdquo;&nbsp;&lsquo;Existential challenge&rsquo;&nbsp;Addressing the economic impact of recent flooding, the minister emphasized that climate change remains &ldquo;an existential challenge&rdquo; for Pakistan. &ldquo;While agriculture, particularly rice and cotton crops, has suffered due to flooding, growth is still expected to remain close to 3.5% for FY2025-26.&rdquo; On Pakistan&rsquo;s partnership with China, Aurangzeb reaffirmed &ldquo;the long-standing and robust nature of bilateral relations, highlighting the launch of CPEC Phase 2.0.&rdquo; The finance minister said the new phase focuses on industrial cooperation, special economic zones, and private-sector-led investments. &ldquo;During the prime minister&rsquo;s recent visit to Beijing, 24 joint venture agreements were signed across key sectors such as mining, agriculture, information technology, artificial intelligence, and pharmaceuticals, signaling strong investment traction.&rdquo; Digital transformation&nbsp;The minister, while elaborating on the government&rsquo;s digital transformation agenda, said: &ldquo;Efforts are underway to digitize all government payments and strengthen digital infrastructure across sectors.&rdquo; &ldquo;These initiatives have contributed to improved transparency and a broader tax base, reflected in the increase of the tax-to-GDP ratio from 8.8% to 10.2%. The integration of artificial intelligence and data analytics has also significantly enhanced the efficiency of tax administration,&rdquo; he added. Trade policy&nbsp;Discussing trade policy, Aurangzeb mentioned that &ldquo;Pakistan recently concluded tariff negotiations with the United States, securing favorable rates that are expected to benefit textile exporters, particularly in the home textile segment.&rdquo; He underlined Pakistan&rsquo;s broader commitment to trade diversification, noting the government&rsquo;s increased engagement with Central Asian republics and South-South economic cooperation frameworks. In reference to the Shanghai Cooperation Organization Summit held in Tianjin, China, the finance minister expressed support for &ldquo;President Xi Jinping&rsquo;s Global Governance Initiative, which emphasizes sovereign equality, the rule of law, and multilateralism.&rdquo;&nbsp; He noted that these principles align closely with Pakistan&rsquo;s approach to global engagement and cooperation. Aurangzeb underscored that &ldquo;Pakistan remains firmly committed to macroeconomic stability, structural reform, and sustainable, inclusive growth, with a clear focus on strengthening resilience, encouraging investment, and advancing the country&rsquo;s long-term development agenda&rdquo;, the press release concluded.

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‘Fiscal and external accounts have stabilized, the exchange rate has remained steady, and foreign exchange reserves have increased to 2.5 months of import cover;’ ‘inflation has returned to single digits, the policy rate has been reduced by half’ -- Finance Minister 

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Pakistan says IMF benchmarks part of ongoing reform agenda

Financial stability has helped Pakistan regain access to international markets: finmin