Pakistan likely to clear first review of $7bn IMF loan: report

Pakistan is likely to pass the first review of its $7 billion loan program with the International Monetary Fund since it has made enough progress to raise revenue, according to officials and diplomats familiar with the matter, reports Bloomberg.

The government of Prime Minister Shehbaz Sharif has approved a law to tax agricultural income, attempted to sell a stake in state-owned Pakistan International Airlines and taken steps to meet an ambitious tax target, and have presented these developments to the IMF, the people said, asking not to be identified because the discussions are private.

The IMF office in Islamabad and Pakistan’s finance ministry didn’t respond to a request for a comment.An IMF team led by Mission Chief to Pakistan Nathan Porter is in Pakistan this week to meet with government officials and assess their progress in meeting the loan conditions. If the IMF approves the first review of the loan, the country is in line to receive about $1 billion as the second instalment of the loan package. The IMF review is being closely watched by investors as a sign of progress in economic reforms.

Sharif told the global lender’s Managing Director Kristalina Georgieva last month his government plans to submit a plan to boost economic growth after achieving stability. The IMF chief said in an X post the lender was encouraged by Pakistan’s strong commitment and reforms.

A team from Pakistan led by Finance Minister Muhammad Aurangzeb started the “kick-off meeting” with the IMF team on Tuesday, the ministry said in a statement. Aurangzeb said in an interview last month the country will meet its revenue goals for the fiscal year to June and any shortfall will be met by expanding the tax net. He has separately said the nation is confident to meet other targets of the program.

Pakistan was able to build some trust with the IMF by completing a short-term nine-month programme last year. Previous loan programs in Pakistan ended prematurely or saw delays after the governments at the time faltered on meeting key conditions.