Pakistan-IMF Talks End Without Staff-Level Agreement, Virtual Discussions Expected

Despite Pakistan’s improved economic performance, the latest round of talks between the International Monetary Fund (IMF) and Pakistan concluded without reaching a staff-level agreement. However, sources suggest that outstanding issues may be resolved through virtual discussions in the coming weeks.

Pakistan is required to implement several conditions outlined in the Memorandum of Economic and Financial Policies (MEFP) before securing the next tranche of the $7 billion loan program. These measures include increasing the petroleum levy by Rs 10 per litre, bringing it up to Rs 70 per litre, and possibly imposing a carbon levy.

The IMF has also emphasized reforms in the tax and energy sectors, urging the government to expand the tax base by bringing the retail, wholesale, and real estate sectors into the formal tax net. Additionally, the privatization of state-owned enterprises (SOEs), such as DISCOs and Pakistan International Airlines (PIA), remains a key concern for the lender.

Sources within the Ministry of Finance reveal that while no immediate agreement was reached, the IMF Executive Board is expected to review Pakistan’s progress in May. If the required conditions are met, the Board will approve the release of the next $1 billion tranche.

Pakistan’s government remains committed to meeting IMF’s fiscal consolidation targets. It has assured the IMF that no mini-budget will be introduced before June and has set an ambitious tax revenue target of Rs 15,000 billion for the next fiscal year. The government also plans to implement direct taxation on agricultural income from large landowners and enforce a super tax on industrialists.

With GDP growth expected to exceed 4% next year and inflation projected to remain in single digits, Pakistan remains hopeful of securing external financing to meet its economic goals. However, the success of these reforms and IMF’s final approval remain critical for economic stability.