AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
ISLAMABAD: In a detailed report released by the International Monetary Fund (IMF), Pakistan’s economic landscape is poised for significant shifts as the country navigates its Extended Funded Facility (EFF) and Resilience and Sustainability Facility (RSF). The IMF report highlights Pakistan’s progress, challenges, and future commitments, including the introduction of 11 new structural benchmarks.
According to the report, Pakistan has successfully met six out of seven Quantitative Performance Criteria (QPC) and four out of eight Indicative Targets (ITs). The only QPC missed was related to the floor on targeted cash transfer spending, with a marginal shortfall of Rs463 million, accounting for 0.0004% of the GDP. Meanwhile, missed ITs included spending on health and education, provincial primary deficit ceilings, federal tax revenue floors, and tax refund accumulations.
A notable aspect of the report is the introduction of 11 new structural benchmarks aimed at reforming tax policy, enhancing governance, implementing fiscal reforms including privatization, and promoting market liberalization. Significant measures include an assessment of remittance costs, a policy for sugar market liberalization, and the publication of asset declarations by high-level federal officials.
The report also notes a reduction in the principal amount of gas sector circular debt by Rs86 billion due to gas price adjustments, though the total debt remains significant at Rs3.2 trillion due to increased Late Payment Surcharges.
In the fiscal outlook, Pakistan is set to explore international bond markets with a projected $250 million panda bond in FY26 and a $1 billion bond in FY27. The Federal Board of Revenue’s (FBR) tax revenue target has been adjusted to Rs13.97 trillion, reflecting a reduction due to flood-related economic impacts.
The IMF emphasizes contingency measures if revenue targets fall short by December 2025, including increased excises on fertilizers, pesticides, and sugary items, as well as broadening the sales tax base. Additionally, the government will review microfinance bank models to address vulnerabilities linked to the agricultural sector and recurrent flooding.
In electricity sector reforms, the government plans to revisit subsidy structures to better support low-income consumers, potentially through cash transfers aligned with the existing BISP database. Furthermore, deregulation efforts will focus on the wheat and sugar markets, with federal-provincial agreements and a cabinet-adopted national policy to guide the liberalization process.