Pakistan close to meeting IMF targets ahead of review: AHL

Pakistan is expected to meet all seven Quantitative Performance Criteria (QPCs) under its ongoing International Monetary Fund (IMF) programme ahead of the Fund’s upcoming review, Arif Habib Limited (AHL) said on Saturday.

Pakistan is expected to meet all seven Quantitative Performance Criteria (QPCs) under its ongoing International Monetary Fund (IMF) programme ahead of the Fund’s upcoming review, Arif Habib Limited (AHL) said on Saturday.

“Based on publicly available data, we believe Pakistan is on track to meet nearly all seven QPCs, with one data point yet to be disclosed,” the brokerage said in its report titled Pakistan’s Economic Outlook.

“As QPCs represent the programme’s hard benchmarks, meeting them would pave the way for a smooth review with limited risk of waivers or major hiccups,” it added.

The IMF staff mission is scheduled to visit Pakistan next month for discussions on the fourth review under the Extended Fund Facility (EFF) programme and the second review under the Resilience and Sustainability Facility (RSF).

The Fund’s Executive Board completed the previous review in May, releasing around $1.1 billion under the EFF and $220 million under the RSF, taking cumulative disbursements under both programmes to about $4.8 billion.

“More importantly, the upcoming review is less about securing new commitments and more about demonstrating consistency in implementation, in our view,” AHL said.

The brokerage noted that the upcoming review would also be the first full review since Moody’s and S&P upgraded Pakistan’s credit ratings and the country issued its first Panda Bond.

“A clean review would reinforce the view that improving credit ratings and market access are reflecting genuine progress in reforms—not simply running ahead of the fundamentals,” the report said.

However, AHL highlighted fiscal challenges, particularly the Federal Board of Revenue’s failure to meet its fiscal year 2026 tax collection target by Rs1.1 trillion against the initial target of Rs14.1 trillion.

The brokerage said the shortfall “would squeeze the FY27 fiscal math”, noting that it expects the fiscal deficit to widen in the coming fiscal year.

“We expect the fiscal deficit to widen to 3.9% of GDP in FY27f, from 2.6% in FY26, while the primary surplus remains positive at 2.0% of GDP,” AHL said.

During its upcoming visit, the IMF mission is expected to assess Pakistan’s economic performance for January-June 2026 and hold negotiations for the release of the next tranche under the EFF and RSF.

The review is also expected to cover tax collection, energy-sector reforms and progress on the government’s privatisation programme.

Following the visit, IMF staff and Pakistani authorities are expected to reach a staff-level agreement, which would then require approval from the IMF Executive Board.

Upon approval, Pakistan is expected to receive around $1 billion under the EFF and $200 million under the RSF.