Pakistan has successfully met 25 out of 26 targets set by the International Monetary Fund (IMF) during its second review.
The achievement was reported by the finance ministry, which compiled a comprehensive report indicating Pakistan’s adherence to the conditions imposed by the international lender. The report has been promptly dispatched to the IMF for their assessment.
Among the fulfilled conditions were the prohibition of taking loans from the State Bank of Pakistan (SBP) and the timely repayment of international loans. Pakistan also ensured the prompt settlement of tax refunds and pending payments in the power sector. Additionally, the condition against providing tax amnesty and exemption was met.
The requirement to increase electricity and gas prices was also satisfied. Pakistan expresses optimism in completing the remaining target before the scheduled arrival of the IMF team in Islamabad, according to sources.
Despite these positive developments, Fitch Ratings raised concerns earlier this week, stating that the close outcome of Pakistan’s recent election and the resulting political uncertainty could pose challenges in securing a financing agreement with the IMF.
The current Stand-By Arrangement (SBA) is set to expire in March 2024. The credit rating agency emphasizes the significance of a new agreement for Pakistan’s credit profile, anticipating that a deal will likely be achieved within a few months.
However, extended negotiations or a failure to secure an agreement could elevate external liquidity stress and increase the likelihood of default.
