Pakistan’s government expressed confidence as a nine-member IMF mission, led by Nathan Porter, arrived on March 3, 2025, to conduct the first biannual review of the country’s $7 billion Extended Fund Facility (EFF). The 10-day talks, ending March 14, will assess Pakistan’s adherence to the 37-month programme signed in September 2024. A successful review could release a $1.1 billion tranche within three weeks, according to Dawn News.

A senior official involved in the preparations acknowledged minor delays in meeting some deadlines but said these had been addressed. The review focuses on the fiscal period from July to December 2024. While revenue shortfalls posed a challenge—driven by lower-than-expected cotton, wheat, and industrial output—the government offset this with a higher primary budget surplus and non-tax revenues, such as petroleum levies and telecom profits. Revised macroeconomic conditions also influenced targets, with the IMF recently lowering Pakistan’s growth forecast to 3% from 3.2%.

Debt management has improved, with the average debt maturity period extended from 32 to over 39 months, easing repayment pressures. The official noted that over-performance in some areas could balance under-performance elsewhere during IMF discussions. Most of the 17 structural benchmarks have been met, though some, like retail tax net expansion and Sovereign Wealth Fund law amendments, require further work.

The Ministry of Planning has outlined new criteria for Public Sector Development Programme (PSDP) projects, prioritizing strategic, high-impact, and climate-resilient initiatives starting next budget. A key IMF requirement—amending the Civil Servants Act by February 2025—will mandate digital asset declarations for senior officials, ensuring transparency.

The IMF programme aims to boost Pakistan’s tax-to-GDP ratio by 3%, with 45% of the fiscal adjustment already legislated in the 2024-25 budget, alongside steep electricity tariff hikes. Remaining goals include tax system reforms, energy sector fixes, and public enterprise restructuring. Just before the visit, the IMF emphasized expanding the tax base—targeting retailers, property owners, and agricultural income—while streamlining rates and enhancing customs revenue. Despite challenges, Pakistan remains hopeful for a positive outcome.