ISLAMABAD – In the last week of October, Pakistan will host a mission from the International Monetary Fund (IMF) to review the country’s economic performance during the initial three months of the current fiscal year. This mission is expected to play a crucial role in assessing Pakistan’s economic stability and prospects.
Sources within the Ministry of Finance have confirmed that discussions will be held between the caretaker government and the IMF mission to explore potential reforms across various sectors, including taxation and energy, as reported by the Express Tribune.
Successful completion of the economic review is expected to unlock the release of the next installment of $700 million from the IMF, contingent upon approval by the IMF board.
In addition to the economic review, it has been reported that a comprehensive plan for expenditure reduction has been prepared. Discussions will revolve around implementing this plan, which may involve measures such as freezing allowances, pension reforms, and suspending officer recruitment. Moreover, the government is likely to face pressure to increase gas prices in accordance with IMF recommendations.
The agreement between Pakistan and the IMF reached a significant milestone on June 29 when they struck a staff-level pact for a $3 billion stand-by arrangement. This decision came at a critical juncture for Pakistan, as it was on the verge of default, grappling with a severe balance of payments crisis and dwindling foreign exchange reserves.
While the agreement can be seen as a bridge loan, it provided much-needed relief to Pakistan, stabilizing its economic situation and allowing for critical financial support during a challenging period.
The upcoming mission by the IMF holds great significance for Pakistan’s economic stability and recovery efforts. It reflects the ongoing commitment to addressing economic challenges and implementing necessary reforms to ensure a more robust and sustainable financial future for the country.