IMF Review Likely in First Week of March

Negotiations between the International Monetary Fund (IMF) and Pakistan for the next tranche of the $7 billion bailout package are expected to begin on March 3, with the lender’s review mission likely to stay in the country until March 14. The mission under Nathan Porter’s supervision will assess Pakistan’s economic performance from July to December 2024 to determine the release of the next $1 billion tranche. Key discussions will focus on tax reforms like income tax on the agricultural sector, privatization progress, fiscal policies, and energy sector reforms. The IMF will also review monetary policy, interest rates, inflation, and exchange rate management. The approval of the tranche will depend on a final decision by the IMF Executive Board. Separately, a technical delegation of the IMF is already in Pakistan for a Governance and Corruption Diagnostic Assessment. The delegation is meeting officials from seven key institutions today, including the Judicial Commission and the Supreme Court, to discuss judicial appointments and legal matters. Meetings are also scheduled with the Auditor General of Pakistan, the Federal Board of Revenue (FBR), the Securities and Exchange Commission of Pakistan, and ministries handling climate change and housing. The IMF’s assessment will focus on corruption risks in six critical areas including financial and central bank governance, fiscal oversight, market regulation, rule of law, and anti-money laundering. A report on governance and corruption vulnerabilities is expected in July.