Nathan Porter, the International Monetary Fund’s (IMF) mission chief for Pakistan, met with Finance Minister Mohammad Aurangzeb on Tuesday to review the performance of the $7 billion Extended Fund Facility (EFF) granted to the country in September. The meeting marks the start of an unanticipated IMF visit to Pakistan, taking place four months before the first formal review scheduled for early 2025.
According to a statement from Pakistan’s Finance Ministry, the IMF mission, which will remain in Islamabad until November 15, is set to discuss recent economic developments and the progress of the current loan program. The timing of the visit, described by Reuters as “unusual,” signals underlying concerns about Pakistan’s economic indicators and program targets.
This unscheduled visit follows news that Pakistan is facing a significant shortfall in revenue collection, reported to be around Rs190 billion during the first four months of the fiscal year. Nearly half of this deficit was recorded in October alone, raising alarms within IMF circles. The authorities have attributed part of this decline to a slowdown in inflation, which has affected revenue growth.
Sources revealed that the IMF’s discussions with Pakistan’s Federal Board of Revenue (FBR) included plans to enhance enforcement and administrative measures to bridge the revenue gap. The FBR team reportedly assured the IMF that these measures were beginning to show early results and would help recover the losses by the end of November. However, there is also speculation that Pakistan may propose a downward revision of revenue targets, avoiding the need for a supplementary budget.
Additionally, the IMF mission is set to assess the status of Pakistan’s privatization efforts, which recently faced a setback after complications in the sale of Pakistan International Airlines. This failure has raised concerns over the process of prequalifying bidders and the overall strategy for privatizing state-owned enterprises.
Over the next few days, discussions between IMF officials and Pakistani authorities will focus on critical benchmarks such as federal revenues, state-owned enterprise reforms, the external financing gap, and the fiscal policies of provincial governments. Ensuring these elements remain aligned with program goals is vital for maintaining the IMF’s credibility and Pakistan’s ability to secure future disbursements, with the next $1 billion tranche expected by March 2025, following the program’s first review.
This visit underscores both the IMF’s and Pakistan’s commitment to addressing potential economic slippages proactively, as they seek to stabilize the financial landscape and maintain trust in the extended facility agreement.
