Web Desk

ISLAMABAD: Pakistan&#39;s Ministry of Finance has published the International Monetary Fund (IMF)&rsquo;s &ldquo;Governance and Corruption Diagnostic Assessment &ndash; November 2025&rdquo; (GCDA) of Pakistan on its official&nbsp;website. The GCDA says Pakistan&rsquo;s policy efforts under the Extended Fund Facility have already delivered significant progress in stabilizing the economy and rebuilding confidence, amid a challenging global environment. &ldquo;Fiscal performance has been strong, with a primary surplus of 2.0 percent of GDP achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1 percent of GDP.&rdquo; &ldquo;Inflation fell to a historic low of 0.3 percent in April, and progress on disinflation and steadier domestic and external conditions have allowed the State Bank of Pakistan to cut the policy rate. Gross reserves stood at US$10.3 billion at the end of April, up from US$9.4 billion in August 2024, and are projected to reach US$13.9 billion by the end of June 2025 and continue to be rebuilt over the medium term,&rdquo; it adds. Anti-corruption recommendationsAmong the 11 actions recommended on anti-corruption, the GCDA stresses on focusing on the main agencies and making action plans public, saying: &ldquo;...adopt and implement a risk-based approach to addressing corruption vulnerabilities in federal agencies by: (i) publishing an action plan to mitigate risks in the top ten agencies with highest corruption risks and macro critical exposures based on a centralized assessment using pre-established and public criteria (Year 1); and (ii) annually reporting on implementation progress and risk reduction outcomes in these agencies (Year 2).&rdquo; The recommendations include enhancing &ldquo;the NAB&rsquo;s independence and effectiveness in investigating high-level corruption by strengthening appointment procedures of its head, enhancing investigative capacities, and establishing robust internal accountability.&rdquo; &lsquo;Asset declarations of high-level public officials&rsquo;&nbsp;The report recommends establishing a centralized authority to collect, digitize, and publish asset declarations of high-level public officials with adequate powers and resources to conduct risk-based verification. It stresses &ldquo;increased information sharing by making use of protocol among NAB (National Accountability Bureau), AGP (Auditor-General of Pakistan), and FBR (Federal Board of Revenue) to assess corruption risks and identify suspicious transactions/behaviors for further investigation.&rdquo; It recommends strengthening FIA&rsquo;s (Federal Investigation Agency) investigative capacities on corruption offenses and deepening coordination and collaboration with NAB. Asset declaration of high-level federal civil servants&nbsp;The GCDA also recommends enhancing &ldquo;the independence of Provincial Anti-Corruption Establishment by removing the requirement for approval of higher authorities for corruption investigations, enhancing investigative capacities, and establishing robust internal accountability mechanisms.&rdquo; &nbsp; It recommends strengthening &ldquo;the independence of the accountability courts by establishing a transparent and merit-based process for appointing judges and beginning to publish performance information based on a robust framework.&rdquo; The GCDA also lists strengthening &ldquo;accountability and integrity among high-level federal civil servants by initiating the publication of asset declarations in 2026, and introducing risk-based verification of asset declarations.&rdquo; Membership in key networks&nbsp;The assessment further recommends pursuing &ldquo;membership in key international networks for sharing of information and transparency, including the Egmont Group, ARIN, and Open Government Partnership&rdquo; and&nbsp;stresses on &ldquo;ensuring proactive disclosure of information by public agencies and improving responsiveness to RTI requests.&rdquo; It also recommends establishing a Whistleblower Protection regime and forming a Whistleblower Protection and Vigilance Commission.

Economy

The IMF’s governance assessment for Pakistan recommends risk-based anti-corruption reforms, stronger oversight bodies, asset-declaration systems, whistleblower protections, and judicial independence, while noting progress toward economic stabilization, falling inflation, rising reserves, and strong fiscal performance under ongoing policy efforts.

Pakistan’s finance ministry releases IMF report highlighting reform needs

Gaitty Ara Anis

WASHINGTON, DC: Pakistan&rsquo;s mining sector is poised for major expansion, with Finance Minister Muhammad Aurangzeb projecting that the first year of commercial operations at the Reko Diq copper and gold project could generate $2.8 billion in copper exports, a 10% increase in the country&rsquo;s overall export base.&nbsp;Speaking exclusively to Pakistan TV Digital&nbsp;at the conclusion of his weeklong US visit for the IMF-World Bank Annual Meetings in Washington, Aurangzeb said the project is only the beginning, with additional mines and concessions expected to come online in the coming years.&nbsp;&ldquo;This is just the start because there are other mines and concessions coming through,&rdquo; he said.&nbsp;Aurangzeb highlighted that the Reko Diq project is attracting US investment, with the International Finance Corporation (IFC) leading the syndication and the US EXIM Bank expected to participate once the US government shutdown concludes.&nbsp;Islamabad&rsquo;s long-term vision includes smelting and value addition, which will enhance Pakistan&rsquo;s industrial output. &ldquo;That&rsquo;s not going to happen overnight, but where we are headed has huge upside for Pakistan,&rdquo; he said.&nbsp;Yuan bonds: diversifying Pakistan&rsquo;s fundingAlongside mining, Pakistan plans to issue its first-ever yuan-denominated bonds worth $250 million by the end of 2025, part of a strategy to diversify funding sources and strengthen macroeconomic resilience.&nbsp;&ldquo;From our perspective, this is a very important trade, a funding diversification discussion,&rdquo; Aurangzeb said. &ldquo;We have previously done Euro issuances and US dollar Islamic support, so we have been late, quite frankly, in terms of tapping the second-largest and second-deepest capital market in the world.&rdquo;&nbsp;He said the government will raise about $250 million equivalent in Chinese yuan (RMB) in the first phase and called the move &ldquo;long overdue&rdquo; to strengthen ties with Asian markets and reduce reliance on Western financial channels.&nbsp;Aurangzeb confirmed that the issuance will feature credit enhancement from the Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB).&nbsp;&ldquo;We are following the Egyptian model because they had credit enhancement so that we will have the same from AIIB and ADB,&rdquo; he explained.&nbsp;Two non-deal roadshows have already generated &ldquo;strong investor interest,&rdquo; and the minister said the issuance is expected to be completed before the end of the calendar year, supported by &ldquo;very strong underwriters.&rdquo;&nbsp;Macroeconomic stability and reform commitment&nbsp;Aurangzeb said the bond issuance is part of a broader strategy to consolidate macroeconomic stability, which has shown notable improvements.&nbsp;&ldquo;If we look at it holistically, around macroeconomic stability, a stable currency, FX reserves, inflation coming into single digits, and the policy rate coming down. We are making progress that now has two external validations,&rdquo; he said.&nbsp;He cited the IMF staff-level agreement and upgrades from all three major credit rating agencies as indicators that Pakistan&rsquo;s reform direction is recognized internationally.&nbsp;&ldquo;That too has happened after the test of two and a half to three years,&rdquo; he added.&nbsp;Aurangzeb stressed that the government is focused on long-term sustainability, emphasizing reforms in taxation, energy, state-owned enterprises, and public finances.&nbsp;&ldquo;That is what is going to give permanence, because oil prices can go up and down,&rdquo; he said.&nbsp;Privatization drive&nbsp;On privatization, Aurangzeb acknowledged past delays but emphasized that progress is now decisive.&nbsp;&ldquo;This is one area where we haven&rsquo;t done well in the last 18 months,&rdquo; he said. &ldquo;But we are beginning to move in that direction.&rdquo;&nbsp;The first privatization in this cycle was the sale of a small public-sector bank to a UAE-based conglomerate.&nbsp;&ldquo;It&rsquo;s a step in the right direction. They have big plans in terms of investment flows and maybe even going digital with that institution,&rdquo; he said.&nbsp;Describing the transaction as the &ldquo;first run on the board,&rdquo; Aurangzeb said it demonstrates the government&rsquo;s commitment to structural reform.&nbsp;The Pakistan International Airlines (PIA) privatization is also advancing.&nbsp;&ldquo;Last year we weren&rsquo;t successful, but this year, with the reopening of flight routes to Europe in January and to the UK recently, the airline&rsquo;s value proposition has improved,&rdquo; he said.&nbsp;A shortlist of qualified bidders has been finalized, and due diligence is ongoing.&nbsp;&ldquo;I&rsquo;m quite sanguine that before the year is out, this is going to go through,&rdquo; he added.&nbsp;The minister also mentioned finalizing a sell-side advisor for the Roosevelt Hotel transaction in New York. Additionally, three power distribution companies (DISCOs) are in Phase One of privatization, with international advisors Albert Alers and Marcelis leading the process.&nbsp;&ldquo;We have good traction there as well,&rdquo; he said, noting that 24 state-owned enterprises have been handed over to the Privatization Commission. &ldquo;The first one is the first drop,&rdquo; he added, echoing Prime Minister Shehbaz Sharif&rsquo;s remarks.&nbsp;Building economic resilience&nbsp;Aurangzeb emphasized the importance of fiscal and external buffers to manage global economic cycles.&nbsp;&ldquo;At some point, these cycles will reverse. Commodities go through cycles, and countries go through cycles. Countries that do well are those that build buffers, fiscal and external, and let the private sector lead growth,&rdquo; he said.&nbsp;He added that with renewed investor confidence, structural reforms, and diversified funding, Pakistan is now positioned to convert early recovery signs into long-term sustainable stability.&nbsp;&ldquo;The direction of travel is clear. We are turning the first drops of progress into a steady stream of sustainable reform,&rdquo; Aurangzeb concluded.

Pakistan finance minister Muhammad Aurangzeb

In a wide-ranging interview with Pakistan TV Digital, Finance Minister Muhammad Aurangzeb says Pakistan will generate $2.8 billion in copper exports, issue $250 million yuan bonds, and advance privatizations.

Pakistan’s Reko Diq copper project to generate $2.8B in first-year: finance minister

WASHINGTON DC: &nbsp;Pakistan faces a critical challenge in balancing its $1.2 billion International Monetary Fund (IMF) aid with the urgent need for climate resilience, as experts urge a shift from short-term bailouts to long-term investments in flood defenses, early warning systems, and community-level adaptation. The recent climatic changes faced by Pakistan, especially in the form of widespread flooding, have left it reeling from financial and social impacts. The IMF recently reached an agreement with Pakistan to provide $1 billion under its Extended Fund Facility (EFF) and $200 million under its Resilience and Sustainability Facility (RSF) this week, bringing total disbursements under the two arrangements to about $3.3 billion up till now. In its recently issued statement, the IMF highlighted the devastation caused by flash floods that impacted &quot;7 million people, causing over 1,000 deaths and severely damaging&quot; everything from housing to agricultural land, consequently bringing down the projected FY26 GDP to about 3&frac14; &ndash; 3&frac12; percent. Because the IMF deems Pakistan &quot;vulnerable&quot; to natural disasters, this has sparked a new debate on how to achieve &quot;climate resilience.&quot; Expenditure transparency&nbsp;Climate change and economic experts view no single fix to this situation but rather look for a multi-pronged approach, starting with the right allocation of funds released under the RSF program. Dr Abid Qaiyum Suleri, the executive director of the Pakistan-based think-tank, the Sustainable Development Policy Institute (SDPI), told Pakistan-TV Digital that to ensure expenditure transparency, &quot;Each rupee should be tied to clearly defined resilience outcomes&mdash;such as improved flood protection, drought-resistant agriculture, or community-level adaptation projects&mdash;and implemented through provincial and district mechanisms that involve local stakeholders.&quot; &lsquo;Ex-ante measures&rsquo;As a cash-strapped country, staying aligned with the conditions of the EFF loan program while managing the catastrophic climatic changes Pakistan is dealing with can be challenging. But is there room for making arrangements ahead of a climatic event? &nbsp;Zainab Majoka, a social protection economist based in Washington and working with the World Bank, commented that it is hard to fix anything once the catastrophe has already hit. &quot;A delay of even a few hours can lead to huge losses of life.&quot; Therefore, for countries like Pakistan, which are increasingly vulnerable to climate shocks, there is a dire need to invest in &quot;ex-ante measures,&quot; or measures implemented before the shock hits. &lsquo;Switching the composition&rsquo;&nbsp;One such area is Early Warning Systems (EWS). Majoka added that EWS are integrated data systems designed to provide timely and actionable warnings of impending hazards.&nbsp; &quot;In the recent past, these data systems have improved significantly in their accuracy and can provide robust information in advance,&quot; creating a time window where the government can start planning before the shock hits. The real question is whether Pakistan can allocate a major amount for such systems with proper checks and balances in place while availing the EFF, which comes with strings attached. &quot;Pakistan can expand climate adaptation and green infrastructure without breaching the EFF ceiling by switching the composition of spending rather than its size,&quot; summed up Dr Suleri. &lsquo;Phasing out untargeted subsidies&rsquo;He suggested phasing out untargeted energy subsidies and bailouts; ring-fencing the savings for flood defenses, drainage, resilient roads, and water systems; pruning low-priority Public Sector Development Programme (PSDP) schemes; and lowering the priority of &quot;discretionary&quot; projects as steps in the right direction. Majoka and Dr Suleri both emphasized the need to strengthen not just a sector but the &quot;whole community&quot; to face any untoward climatic incident. The experts believe a shift from blanket price support to targeted cash via the Benazir Income Support Program (BISP) is one of the best measures to keep all &quot;costs low.&quot;&nbsp; The money to ensure that communities are built to face recent flooding-like situations can be procured by unwinding costly tax exemptions, bringing high-end real estate and retail into the revenue net, enforcing provincial agriculture-income taxation, and introducing a modest carbon levy with part of the yield earmarked for adaptation. Livelihood diversificationMajoka also advocated for providing easy access to safety nets, such as income support programs already helping vulnerable and poor households, which can further build resilience against shocks. In Pakistan, &quot;Benazir Income Support Program can be leveraged for that.&quot;&nbsp; She seconded Dr Suleri on this point. Such programs can be complemented with other measures such as livelihood diversification, where a household has multiple sources of income.&nbsp; &quot;We know from evidence that such programs also help to cope with climate shocks.&quot; RSF as &lsquo;strategic anchor&rsquo;&nbsp;According to Dr Suleri, Pakistan can use the IMF&rsquo;s RSF as a strategic anchor for a long-term climate-resilient growth model rather than a short-term disaster fund. To do so, the government should align RSF-supported reforms with a broader green industrial strategy: one that links climate adaptation with competitiveness, investment, and jobs.&nbsp; This means embedding resilience criteria into all infrastructure planning, incentivizing green energy and water-efficient industries, and setting measurable national targets for emission reduction and resource efficiency. But a long-term planning approach should be taken into account for that timely access to resources and money is a key element guaranteeing preparedness against disasters. Contingency financing&nbsp;Contingency financing is another tool that many Latin American countries are already using to achieve this goal, Majoka said. &quot;Contingency financing can take many forms, but it essentially means that the government has access to liquid funds. So, instead of once the shock hits, the government starts to look for money, it already knows that certain triggers are set linked to the contingency financing.&quot; In countries such as Chile, Colombia, and Mexico, they have catastrophe bonds that provide liquidity as soon as the shock hits. This improves the timeliness of the response and reduces the overall cost of recovery and relief. Even with all the appropriate and necessary steps taken, the IMF views that &quot;maintaining tight and data-dependent monetary policy will go a long way to build resilience against climatic changes that are rapidly changing the geo-economic structure of Pakistan.&quot;

Climate & Environment

The IMF recently reached an agreement with Pakistan to provide $1 billion under its Extended Fund Facility (EFF) and $200 million under its Resilience and Sustainability Facility (RSF) this week.

IMF aid vs climate reality: Can Pakistan achieve resilience? 

WASHINGTON: Pakistan&#39;s Finance Minister Muhammad Aurangzeb on Thursday said that his country&nbsp;was making a deliberate shift towards export led growth driven by the private sector, aiming to end the reliance on consumption and import-fueled boom-bust cycles. While speaking to a panel at the Atlantic Council &mdash; a DC based think-tank focused on international affairs &mdash; during his visit to the US, the finance minister said that the government had adopted the bold National Tariff Policy (NTP) to enable the plans.&nbsp; Aurangzeb also provided an overview of the country&#39;s economic trajectory, structural reforms, and the immediate challenges posed by climate change, adding that the shift in the policy reflected an &quot;East Asia view&quot; of economic growth, aiming to significantly reduce custom duties, additional custom duties, and regulatory duties over the next few years.&nbsp; The finance minister said that the focus was on making raw materials and intermediate goods cheaper to boost the competitiveness of exporters.&nbsp; He said that while textiles remain the core export sector, IT services were set to play a crucial role.&nbsp; &ldquo;A major upcoming boost is the Reko Diq project, which is expected to inject approximately $2.8 billion in exports in its first year, representing about 10% of the current export base,&rdquo; he said. The finance minister said that the early signs of success included the auto industry starting to finally export.&nbsp; He said that the strategy to enable private-sector growth also involves tackling energy issues, specifically by addressing power sector circular debt and handing over distribution companies to the privatization side. Pakistan reached a Staff Level Agreement with the International Monetary Fund that has completed the second review of its loan program, allowing the country to access $1.2 billion after approval from the fund&#39;s board. The IMF will provide Pakistan $1 billion under its Extended Fund Facility and $200 million under its Resilience and Sustainability Facility, bringing total disbursements under the two arrangements to about $3.3 billion. While talking about managing the macroeconomic stability front &mdash; something the minister talked about on Wednesday during a meeting with the IMF managing director &mdash; the minister noted that Pakistan was on the right direction in this regard.&nbsp; The progress received significant external validation, including the successful completion of the IMF program reviews (EFF and RSF) and, importantly, the alignment and upgrading of Pakistan&#39;s credit ratings by all three major agencies: Fitch, S&amp;P, and Moody&#39;s. The minister agreed that a major element of the stability effort was addressing the nation&rsquo;s largest fiscal burden &mdash; &lsquo;debt servicing.&rsquo;&nbsp; To tackle the single biggest expense for the government, the ministry was employing liability management trades and buying back domestic debt.&nbsp; While responding to a question, the finance minister termed the recent decline in the policy rate a help in reducing the overall volume of debt service.&nbsp; He added that the government is preparing to initiate politically sensitive discussions around the National Finance Commission (NFC) award to reform the revenue-sharing arrangement between the Federation and the provinces.&nbsp; The current setup leaves the Federation with little fiscal liberty after debt servicing, and the minister stressed that it needed to be addressed for the system to remain sustainable. &ldquo;The path to long-term sustainability is anchored in aggressive tax reform. The ministry&rsquo;s commitment is clear, to raise the tax-to-revenue ratio from the previous year&rsquo;s 10.2% to 11% by the end of the current fiscal year, and ultimately to 13% under the IMF program,&rdquo; he said.&nbsp; On how to broaden the tax base in Pakistan, he said that it would be achieved through a two-pronged strategy of broadening and deepening the tax base.&nbsp; Broadening efforts included legislating an agriculture income tax at the provincial level and moving to bring the retail, wholesale, and real estate sectors into the net.&nbsp; Deepening relies heavily on technology, utilizing data analytics and artificial intelligence for digital monitoring and invoicing to curb tax leakages in key sectors like cement, sugar, tobacco, and beverages. The minister termed climate change as one of the two existential threats facing Pakistan &mdash; alongside population growth. Following this year&#39;s flooding, the government opted to use its resources and existing fiscal space for rescue and relief given that the intensity and frequency of devastating floods were on the rise.&nbsp; Due to damage, particularly in the rice and cotton crops, country&rsquo;s GDP growth projection will be shaved down from over 4% but is still expected to land north of 3% for the year. Finance Minister&nbsp;vows deeper economic partnership Saudi ArabiaEarlier in the day, the finance minister reaffirmed Pakistan&#39;s commitment to fostering a deeper economic partnership with Saudi Arabia. During a meeting with Saudi Finance Minister Mohammed Aljadaan on the sidelines of the IMF&ndash;World Bank Annual Meetings in Washington DC, Aurangzeb sought Saudi support for infrastructure development projects with both sides reviewing the growing trade and investment relations. According to Radio Pakistan, he apprised his Saudi counterpart of the ongoing privatization process of Pakistan International Airlines (PIA) and key airports, underscoring the government&rsquo;s resolve to attract strategic investments through transparency and efficiency. The two ministers agreed that institutions such as the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) could play a vital role in mobilizing and de-risking private sector investments in Pakistan. During a meeting with CEO of the US International Development Finance Corporation in Washington DC, Aurangzeb highlighted significant investment opportunities with Pakistan&#39;s oil and gas, mines and minerals, agriculture, IT and pharmaceutical sectors. Finance Minister underscored the consensus at the leadership level to enhance trade and investment ties, welcoming DFC&#39;s interest in facilitating private sector-led funding for projects in Pakistan.

Aiming to end country’s historical reliance on consumption, import-fueled boom-bust cycles.

Pakistan finance minister says focus on export led growth

WASHINGTON: The International Monetary Fund on Tuesday &mdash; after reaching a staff-level agreement with Pakistan &mdash; said that authorities were committed to strengthening public finances, providing support to flood victims, ensuring the inflation target is met, restoring the energy sector&rsquo;s viability, and advancing structural reforms. An IMF team left Pakistan last week without signing the staff-level agreements on reviews of its two main support programs, which are worth a combined $8.4 billion. Earlier on Tuesday, Pakistan Finance Minister Muhammad Aurangzeb said that the country was set to sign a preliminary deal on a review of its loan program with the IMF, a key step to securing a payout from the lender. &quot;The mission was on the ground for a couple of weeks, we had very constructive dialogue with them around the quantitative benchmarks, the structural benchmarks, and we&#39;ve been having some follow-up discussions,&quot; Muhammad Aurangzeb told Reuters during an interview on the sidelines of the IMF and World Bank annual meetings. According to a statement issued by the IMF on Tuesday, the approval of the loan program would allow Pakistan to access $1.2 billion &mdash; $1 billion under the Extended Fund Facility and $200 million under the Resilience and Sustainability Facility &mdash; after approval from the fund&#39;s board, bringing total disbursements under the two arrangements to about $3.3 billion. While quoting the Mission Chief Iva Petrova, the statement said, &ldquo;Pakistan&rsquo;s economic program is entrenching macroeconomic stability and rebuilding market confidence.&rdquo; &ldquo;The recovery remains on track, with the FY25 (fiscal year 2025) current account recording a surplus &mdash; the first in 14 years, the fiscal primary balance surpassing the program target, inflation remaining contained, external buffers strengthening, and financial conditions improving as sovereign spreads have narrowed significantly,&rdquo; Petrova said. However, she added that the recent floods have &ldquo;weighed on the outlook, particularly of the agriculture sector, bringing down the projected FY26 GDP to about 3.25%-3.5%,&rdquo; underscoring Pakistan&rsquo;s high vulnerability to natural disasters and substantial climate-related risks. &nbsp;&ldquo;The authorities reaffirmed their commitment to the EFF- and RSF-supported programs, and to maintaining sound and prudent macroeconomic policies while advancing ongoing structural reforms. The authorities&rsquo; policy priorities include,&rdquo; Petrova said.&nbsp; The statement said that Pakistan remained committed to meeting the FY26 budget primary surplus of 1.6% of GDP, &ldquo;anchored in sustained efforts to mobilize revenue through tax policy and compliance measures, and stand ready to take necessary actions should revenue shortfalls risk program targets.&rdquo; It said that the authorities were also assessing the flood damage, providing &ldquo;urgent flood relief support in the affected provinces via reallocations in the provincial and federal budgets.&rdquo; It added that to strengthen poverty reduction and social protection &mdash; a key pillar of the EFF-supported program &mdash; Pakistan was working to enhance the generosity, coverage, and administrative capacity of the Benazir Income Support Program (BISP).&nbsp; &ldquo;They are also committed to scaling up non-BISP health and education spending at both the federal and provincial levels to support inclusive growth and safeguard vulnerable populations,&rdquo; the statement said. The statement said that efforts were &ldquo;underway to enhance revenue mobilization, broaden burden-sharing between federal and provincial governments, and strengthen public financial management.&rdquo; &ldquo;The authorities are also making important progress in strengthening tax policy design, with the newly established tax policy office, which will lead medium-term reforms to simplify the tax code and reduce reliance on ad hoc measures,&rdquo; the statement said. According to the IMF, the State Bank of Pakistan (SBP) remained committed to a &ldquo;prudent monetary policy stance&rdquo; to ensure inflation remains durably within its target range of 5-7%.&nbsp; It added, however, that further steps were needed to &ldquo;deepen the foreign exchange market to facilitate transactions, support price discovery, and cushion external shocks.&rdquo; The fund&rsquo;s team expressed its &ldquo;sympathy to those affected by the recent floods, and is grateful to the Pakistani authorities, private sector, and development partners for many fruitful discussions and their hospitality throughout this mission.&rdquo; According to Reuters, countries under IMF lending programs need to pass regular reviews, which, once signed off by the fund&#39;s executive board, trigger loan tranche payments. The IMF&#39;s support in September 2024 helped shore up Pakistan&#39;s $370 billion economy following a severe economic crisis that sent the country&rsquo;s currency tumbling, Reuters reported.

Fund says Pakistan committed to strengthening public finances, providing support to flood victims, ensuring meeting inflation target, restoring energy sector’s viability and advancing structural reforms.

IMF reaches staff-level agreement with Pakistan on loans worth $1.2 billion

Reuters

WASHINGTON, Oct 14 (Reuters) - Pakistan is set to sign a preliminary deal on a review of its loan programme with the International Monetary Fund this week, the country&#39;s finance minister said, a key step to securing another $1.24 billion payout from the lender. An IMF team left Pakistan last week without signing so-called staff-level agreements on reviews of its two main support programmes which are worth a combined $8.4 billion. &quot;The mission was on the ground for a couple of weeks, we had very constructive dialogue with them around the quantitative benchmarks, the structural benchmarks, and we&#39;ve been having some follow-up discussions,&quot; Muhammad Aurangzeb told Reuters during an interview on the sidelines of the IMF and World Bank annual meetings. &quot;During the course of this week, we&#39;re hoping that we can get the SLA done.&quot; RETURN TO CAPITAL MARKETSPakistan stocks closed 4% up after the news. Countries under IMF lending programmes need to pass regular reviews, which, once signed off by the Fund&#39;s executive board, trigger loan tranche payments. The IMF support agreed in September 2024 helped shore up Pakistan&#39;s $370 billion economy following a severe economic crisis that sent its currency tumbling. Aurangzeb said the government now plans to return to capital markets, starting with its first green bond denominated in Chinese yuan before the end of the year, followed by an at least $1 billion international bond. &quot;Euro, dollar, Sukuk, Islam Sukuk - we&#39;re keeping our options open,&quot; he said. Long-delayed state asset sales are also expected to gain traction now after disappointing progress last year. Islamabad wants to sell off three power distribution companies and national flag carrier Pakistan International Airlines. &quot;We are quite hopeful,&quot; Aurangzeb said about the planned airline sale, adding that lucrative reopened routes to Europe and Britain made it &quot;a very good proposition.&quot; If it takes off it would be Pakistan&#39;s first major privatisation in roughly two decades. A deal collapsed last year after a single lowball offer, but the government has since drawn interest from five domestic business groups including Airblue, Lucky Cement, investment firm Arif Habib and military-backed Fauji Fertilizer. Final bids are expected later this year. The government also hopes the privatisation of a yet to be named financial institution could move ahead this month. MEETING WITH US OFFICIALSAurangzeb, who is expected to meet with U.S. Treasury Secretary Scott Bessent this week, said Pakistan was relieved to have ended up with a 19% U.S. tariff having originally braced for a 29% levy. Discussions about U.S. investments in the country&#39;s oil and gas and minerals and mining sectors are now taking place, he said, though he added it was early days. Pakistan recently signed a memorandum of understanding with Reko Diq, run by mining firm Barrick Gold, for a first copper mine, with the overall project potentially growing to as much as $6.5 billion to $7 billion, Aurangzeb said. &quot;The potential of this sector is huge,&quot; he said, citing growing demand due to the global energy transition away from fossil fuels. Pakistan is also trying to maintain strong ties with China. &quot;I don&#39;t quite frankly see it as an and-or discussion, it&#39;s very much an and-and discussion for us,&quot; he said, when asked whether Pakistan&#39;s growing ties with Washington signalled a shift in its dealings with Beijing. Asked whether Washington&#39;s reluctance to fund climate change projects could hit Pakistan, Aurangzeb said the country was well-positioned to weather it, given a $1.3-billion Resilience and Sustainability facility with the IMF as well as a $2-billion World Bank programme, of which one-third is earmarked for climate change, and other programmes. &quot;I think there is enough (available funding) at this point in time that we can move forward with the adaptation agenda. The ball is in our court.&quot;

Pakistan will sign a preliminary IMF loan review deal this week, unlocking $1.24 billion. Finance Minister Aurangzeb said the government plans green and international bonds, privatisation of PIA, and renewed investment talks with the U.S. and China.

Pakistan finmin sees staff deal on $1.2 billion IMF payout this week

ISLAMABAD: Pakistan&#39;s Federal Minister for Finance Senator Muhammad Aurangzeb has departed for the United States to attend the annual meetings of the International Monetary Fund (IMF) and the World Bank.&nbsp;According to the Ministry of Finance, the minister will represent Pakistan at the plenary sessions of both international financial institutions and hold meetings with senior officials of the IMF, World Bank, International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA).&nbsp;During his visit, Senator Aurangzeb will hold a one-on-one meeting with World Bank President Ajay Banga and IMF Managing Director Kristalina Georgieva. He will also participate in sessions of the G24, the Middle East, North Africa and Pakistan (MENAP) platform, and the World Economic Forum (WEF).&nbsp;The finance minister will deliver a keynote address at the MENAP Forum and attend a regional roundtable organized by the World Bank on FBR&rsquo;s digital transformation. Tax authorities from various countries will also share their reform experiences at the event.&nbsp;His schedule includes meetings with senior officials of the White House, the US State Department, the Treasury Department, and the International Development Finance Corporation (DFC).&nbsp;The minister is also expected to meet his counterparts from China, the United Kingdom, Saudi Arabia, T&uuml;rkiye, and Azerbaijan.&nbsp;During the six-day visit, Senator Aurangzeb will participate in more than 65 events, including sessions with global investors, credit rating agencies, and think tanks, where he will highlight Pakistan&rsquo;s economic outlook and investment opportunities.

Finance Ministry says Aurangzeb will hold meetings with senior officials of the IMF, World Bank, International Finance Corporation, and Multilateral Investment Guarantee Agency.

Pakistan's finance minister departs for US to attend IMF, World Bank meetings

Faraz Saeed

LAHORE: Pakistan&rsquo;s latest negotiations with the International Monetary Fund (IMF) ended on Wednesday without a staff-level agreement (SLA), briefly delaying the release of around $1.25 billion in loan tranches. Despite the setback, both sides reported &ldquo;significant progress,&rdquo; fueling expectations that a deal will be reached within weeks. The IMF mission concluded its 11-day visit under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), totaling $8.4 billion. The discussions covered the second EFF review and the first RSF review. While no SLA was finalized, statements from Islamabad and the IMF indicated a constructive tone, suggesting that remaining technical issues will soon be resolved. According to officials involved, the IMF has sought higher provincial budget surpluses and a downward revision of the Federal Board of Revenue&rsquo;s (FBR) annual collection target, factoring in the economic impact of recent floods. Punjab is expected to contribute Rs740 billion [$2.64 billion] to the surplus, followed by Sindh, Rs370 billion [$1.32 billion], Khyber Pakhtunkhwa, Rs220 billion [$0.79 billion], and Balochistan, Rs185 billion [$0.66 billion]. The Fund has also requested verified estimates of flood-related losses and assurances that provincial governments can absorb recovery costs without breaching fiscal targets. Notably, the IMF mission did not hold a formal wrap-up meeting with Finance Minister Muhammad Aurangzeb, an unusual, though not unprecedented, indication that talks have entered a sensitive technical phase. The visiting team, led by Mission Chief Iva Petrova, did not issue its customary end-of-mission statement, and the IMF&rsquo;s local office declined to comment. The next round of discussions is expected during the IMF-World Bank Annual Meetings in Washington, where Minister Aurangzeb will lead Pakistan&rsquo;s delegation. Market analysts remain cautiously optimistic. &ldquo;The IMF mission&rsquo;s acknowledgment of significant progress is encouraging,&rdquo; Waqas Ghani, head of research at JS Global, told Pakistan TV Digital. &ldquo;The Fund appears to be seeking stronger, time-bound commitments before finalizing the staff-level agreement. In previous reviews, the SLA often followed a few weeks after the mission&rsquo;s conclusion.&rdquo; Economist Dr. Ikram ul Haq shared a similar view but pointed to underlying structural weaknesses. &ldquo;The staff-level agreement will happen; it&rsquo;s only a matter of time,&rdquo; he said. &ldquo;However, the IMF has flagged discrepancies in trade data amounting to billions of dollars. Pakistan must address under-invoicing, rationalize tariffs, and broaden the tax base, including taxing agricultural income of absentee landowners.&rdquo; The IMF later released a brief statement confirming &ldquo;significant progress&rdquo; toward reaching an SLA on the second EFF review and first RSF review, noting that &ldquo;program implementation remains strong and broadly aligned with the authorities&rsquo; commitments.&rdquo; In parallel, the government notified draft amendments to the Sharing of Assets of Civil Servants Rules, 2023, requiring Grade 17 and above officers to submit electronic declarations of assets and income through the FBR. While armed forces personnel remain exempt, banks must establish secure data channels, part of broader governance reforms under IMF conditionalities. With most macroeconomic targets reportedly met, the remaining gaps appear procedural. Officials expect the SLA to be finalized within weeks, paving the way for IMF board approval and disbursement by late November or early December. For Pakistan, the stakes are high: securing the $1.25 billion tranche would ease external financing pressures, stabilize the rupee, and strengthen market confidence ahead of a politically sensitive budget season. As the IMF team departs and technical work continues virtually, the real challenge for Pakistan lies not just in signing the deal &mdash; but in sustaining the reforms once the funds begin to flow.

Analysts say the IMF’s acknowledgment of “significant progress” reflects confidence in Pakistan’s reform efforts, predicting a staff-level agreement within weeks that could unlock $1.25 billion and bolster market stability ahead of the next budget.

Articles tagged with "IMF"