Finance Minister Muhammad Aurangzeb has announced that a delegation from the International Monetary Fund (IMF) is set to visit Pakistan in early March for a scheduled biannual review of the country’s $7 billion bailout agreement. This engagement is part of a three-year programme established in July to enhance Pakistan’s macroeconomic stability and foster conditions for sustainable growth.
The 37-month Extended Funded Facility programme involves a series of six reviews, and the forthcoming evaluation will determine the release of the next $1 billion tranche. A critical aspect of this review is the assessment of Pakistan’s progress in increasing its tax-to-GDP ratio, a pivotal component for economic stabilization and debt management. Recent figures indicate that in 2024, the salaried class emerged as the third-largest group of income tax contributors, following banks and the petroleum sector, but surpassing textile exporters.
Aurangzeb, addressing the media, emphasized the government’s commitment to reforms in key areas, including the Federal Bureau of Revenue (FBR) and state-owned enterprises. He highlighted ongoing efforts to modernize the FBR through technology and pledged to continue with the privatization agenda. Additionally, Aurangzeb noted the significance of export incentives and reinforced the need for stringent border controls to curb smuggling, specifically mentioning successful sugar exports to Afghanistan.
Concurrently, a specialized technical mission from the IMF has arrived in Islamabad to discuss Pakistan’s request for an additional $1 billion in financing aimed at climate resilience. This comes in response to Pakistan’s vulnerability to climate change, highlighted by catastrophic monsoon floods in 2022 that resulted in over 1,700 casualties, massive displacement, and substantial economic damage.
The request for funds from the IMF’s Resilience and Sustainability Trust was made in October during Aurangzeb’s visit to Washington. The funds are intended to support Pakistan’s efforts in building resilience against climate-related adversities, a priority for a nation frequently impacted by environmental shifts.
