$7 Billion Loan Program Under Scrutiny Amid Economic Strain
An International Monetary Fund (IMF) delegation is set to arrive in Pakistan tomorrow to begin its review of the country’s $7 billion loan program. The visit comes at a time when Pakistan is grappling with the economic impact of severe flooding and struggling to meet tax revenue targets.
The delegation will assess fiscal performance, climate financing progress, and overall macroeconomic indicators. Discussions are expected to include Pakistan’s shortfall in revenue collection and its strategies for economic recovery.
Economic Affairs Secretary Kazim Niaz and other senior officials will lead the talks. The IMF team will also meet with Prime Minister Shehbaz Sharif, Finance Minister Muhammad Aurangzeb, and key members of the economic team.
Earlier, Economic Affairs Secretary Shahid Latif Langrial noted it was too early to comment on potential changes to the annual tax revenue target, which might be revised following IMF discussions.
Pakistan Seeks Relief Measures for Flood-Affected Sectors
Sources within the Finance Ministry have confirmed that Pakistan will request key relief measures from the IMF during the review. These include:
-
Subsidies on electricity bills for flood-hit households.
-
Eased repayment terms for agricultural loans.
-
Revisions to FBR tax targets due to a collection shortfall.
-
Recognition of flood-related revenue losses in fiscal planning.
-
Discussion on lowering the economic growth target slightly.
Officials say Pakistan’s negotiating team has prepared a comprehensive strategy focused on enforcing existing tax laws more strictly, rather than introducing new taxes.
The aim is to show the IMF that the government can meet revenue goals without imposing additional burdens on the public.
PM Orders Strong Case for Economic Relief
Prime Minister Shehbaz Sharif has instructed the finance team to make a robust case for economic relief, citing the heavy toll of recent floods on Pakistan’s economy, particularly in agriculture and rural communities.
The Finance Ministry is expected to argue that revenue can still be increased by improving enforcement and curbing leakages, all while safeguarding low-income groups.
The IMF review is critical for unlocking the next tranche of the loan and restoring investor confidence.
