Farmane-Ilahi

ISLAMABAD (92 News) The review talks between Pakistan and the International Monetary Fund (IMF) concluded successfully, paving the way for the approval of a $2 billion tranche.

The discussions, which focused on the first review of Pakistan's $7 billion Extended Fund Facility (EFF), are expected to result in the release of $1 billion from the EFF and an additional $1 billion in climate financing.

Pakistan's Ministry of Finance confirmed that the revised macroeconomic framework paves the way for disbursement, pending IMF Board approval.

The tax collection target was reduced by Rs620 billion, with the IMF urging the government to focus on increasing revenue and cutting expenditures.

Additionally, Pakistan convinced the IMF to reduce electricity rates by two rupees per unit while also stressing the need for reforms in retail, real estate, and power distribution.

The government committed to completing the privatisation of power distribution companies (Discos) and Pakistan International Airlines (PIA) by June.

A carbon levy is also set to be introduced in July to promote renewable energy, and the IMF expects Pakistan to implement policies to address fiscal challenges, including structural reforms and climate resilience initiatives.

The IMF mission, which visited Pakistan from February 24 to March 14, assessed the country’s progress on fiscal consolidation, energy sector reforms, and climate finance.

It should be noted here that the staff-level agreement is expected to be reviewed by the IMF Executive Board, with disbursements anticipated in the coming weeks.