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Promising Start to Pakistan’s Economic Reform Talks with IMF

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The caretaker government and the International Monetary Fund (IMF) initiated the long-anticipated loan review discussions on a generally optimistic note on Thursday. This sets the stage for in-depth examinations of forward-looking reforms within a nine-month bailout program scheduled for completion in March of next year.

Caretaker Finance Minister Dr. Shamshad Akhtar and the IMF’s mission chief for Pakistan, Nathan Porter, led their respective teams in the initial round of negotiations, which will span two weeks. They discussed the next tranche of funds based on Pakistan’s performance in the first quarter that commenced in July.

Following the meeting, Mr. Porter expressed his appreciation for the government’s dedication to achieving first-quarter targets. He also commended the government for its actions in critical areas and emphasized the need to sustain these efforts to ensure the country’s economic stability.

The meeting, attended by various high-ranking officials, also addressed comprehensive reforms and measures carried out by the Federal Board of Revenue (FBR), contributing to higher-than-anticipated revenue collections.

The IMF team was updated on the government’s strategies to address the circular debt issue in the power and gas sectors. The government provided information on the recent decision to significantly increase the natural gas tariff to prevent circular debt accumulation during the current fiscal year.

Additionally, the government reported that petroleum development levy targets had been surpassed, and a cushion for potential fiscal issues was created. There were discussions about meeting targets for net international reserves and managing fiscal disbursements.

Technical-level discussions with relevant ministries and agencies were scheduled to begin in the coming days, followed by a policy-level dialogue. The review was anticipated to conclude on November 16, focusing on structural reforms, national accounts, and climate-related public investment management.

Finance Minister Dr. Akhtar reaffirmed the government’s commitment to working closely with the IMF to ensure the successful completion of the Standby Arrangement (SBA) and the achievement of economic objectives.

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