Pakistan-IMF formal talks to begin tomorrow on economic reforms and fiscal targets

Formal negotiations between Pakistan and the International Monetary Fund (IMF) are scheduled to begin tomorrow,

ISLAMABAD: Formal negotiations between Pakistan and the International Monetary Fund (IMF) are scheduled to begin tomorrow, with Pakistani authorities preparing to brief the Fund on a range of economic issues, including the Sovereign Wealth Fund, circular debt, tax reforms, foreign exchange reserves and the exchange rate.

According to sources in the Ministry of Finance, Pakistan will brief the IMF on measures being taken to reduce circular debt and will explain the reasons for not deregulating the sugar sector. The Pakistani delegation will also provide an update on the current account position and the primary surplus, along with developments concerning foreign exchange reserves and the exchange rate.

The talks will also involve detailed discussions between the IMF and the Federal Board of Revenue (FBR) regarding efforts to expand the country’s tax base and implement tax reforms. Officials from the FBR’s policy and operational wings are expected to brief the IMF delegation on their performance and progress in implementing revenue-related measures.

The Ministry of Energy will separately brief the IMF on the circular debt issue and ongoing reforms in the energy sector. The discussions are expected to focus on steps aimed at containing the accumulation of circular debt and improving the financial sustainability of the power and energy sectors.

Officials from the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) will also brief the IMF mission on measures taken to strengthen anti-money laundering mechanisms and prevent terrorist financing.

The IMF mission is also expected to hold discussions with the provincial governments of Punjab and Khyber Pakhtunkhwa. The talks will focus on improving tax and non-tax revenue collection at the provincial level. Sources said the collection of agricultural taxes would also be discussed with the provinces as part of efforts to improve revenue mobilisation.

The IMF mission has already held meetings with officials of the State Bank of Pakistan and the Sindh government during its stay in Karachi.

During its discussions with the IMF, the Sindh government informed the mission that it had provided the federal government with the budget surplus agreed under the fiscal framework. According to the briefing, Sindh’s tax revenue stood at Rs593 billion as of June 30, while its non-tax revenue more than doubled to over Rs80 billion during the same period.

State Bank officials also briefed the IMF delegation on the country’s foreign exchange reserves, monetary policy, imports and foreign exchange market. The central bank also provided an overview of Pakistan’s broader economic performance.

Sources said the IMF mission expressed satisfaction with the briefing provided by State Bank officials regarding the monetary and external-sector situation.

After spending approximately one week in Karachi, the IMF delegation has now reached Islamabad, where the formal round of discussions will begin with a meeting between the IMF mission and the Finance Minister and his economic team.

The Pakistani delegation is expected to present detailed data and updates covering the country’s economic performance up to June 30. The discussions will examine fiscal performance, revenue collection, energy-sector reforms, provincial finances, external-sector developments and measures being implemented under Pakistan’s commitments with the IMF.

The upcoming talks are expected to provide an assessment of Pakistan’s progress on key economic targets and structural reforms, with both sides reviewing available data and discussing measures required to maintain fiscal and economic stability.