IMF - International Monetary Fund Program Updates
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ghazi52
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With this tranche, total disbursements to Pakistan under the EFF and RSF now stand at approximately $3.3 billion, supporting both macroeconomic stabilisation and long-term structural reforms for climate resilience.
In a statement released after the meeting of its Executive Board, the IMF highlighted that “Pakistan’s strong programme implementation, despite the recent devastating floods, has maintained stability and improved financing and external conditions”.
It stressed that the country’s policy priorities remain centred on maintaining macroeconomic stability and advancing reforms to strengthen public finances, enhance competition, raise productivity and competitiveness, bolster the social safety net and human capital, reform state-owned enterprises (SOEs), and improve public service provision and energy sector viability.
The board noted that Pakistan’s fiscal performance has been strong, with a primary surplus of 1.3 per cent of GDP achieved in FY25, in line with programme targets. Gross reserves stood at $14.5bn at end-FY25, up from $9.4bn a year earlier, and are projected to continue rebuilding in FY26 and over the medium term. The board also noted that “inflation has increased, reflecting the impact of the floods on food prices, but this is expected to be temporary”.
The statement quoted IMF Deputy Managing Director and Acting Chair Nigel Clarke as saying that “in the face of an uncertain global environment, Pakistan needs to maintain prudent policies to further entrench macroeconomic stability, while accelerating reforms necessary to achieve stronger, private-sector-led, and sustainable medium-term growth”.
He highlighted the importance of “advancing reforms to raise revenues via tax policy simplification and base broadening”, describing it as key to achieving fiscal sustainability and building the fiscal space necessary to boost climate resilience, social protection, human capital development, and public investment.
In a statement released after the meeting of its Executive Board, the IMF highlighted that “Pakistan’s strong programme implementation, despite the recent devastating floods, has maintained stability and improved financing and external conditions”.
It stressed that the country’s policy priorities remain centred on maintaining macroeconomic stability and advancing reforms to strengthen public finances, enhance competition, raise productivity and competitiveness, bolster the social safety net and human capital, reform state-owned enterprises (SOEs), and improve public service provision and energy sector viability.
The board noted that Pakistan’s fiscal performance has been strong, with a primary surplus of 1.3 per cent of GDP achieved in FY25, in line with programme targets. Gross reserves stood at $14.5bn at end-FY25, up from $9.4bn a year earlier, and are projected to continue rebuilding in FY26 and over the medium term. The board also noted that “inflation has increased, reflecting the impact of the floods on food prices, but this is expected to be temporary”.
The statement quoted IMF Deputy Managing Director and Acting Chair Nigel Clarke as saying that “in the face of an uncertain global environment, Pakistan needs to maintain prudent policies to further entrench macroeconomic stability, while accelerating reforms necessary to achieve stronger, private-sector-led, and sustainable medium-term growth”.
He highlighted the importance of “advancing reforms to raise revenues via tax policy simplification and base broadening”, describing it as key to achieving fiscal sustainability and building the fiscal space necessary to boost climate resilience, social protection, human capital development, and public investment.
ghazi52
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IMF imposes 11 new conditions to Pakistan's $7 billion bailout package
Demands anti-graft reforms, sugar sector liberalisation, remittance-cost overhaulShahbaz Rana
December 12, 2025
The government has agreed to the need for a mini-budget if revenues fall short of expectations by end-December 2025, according to the IMF. Photo: file
ISLAMABAD: The International Monetary Fund (IMF) has slapped Pakistan with 11 more stringent conditions to address corruption vulnerabilities, end elite capture of the sugar sector and unearth the true cost of foreign remittances.
The new conditions have also been imposed to reduce losses in the power sector through private sector participation, improve governance and service delivery, and enhance the effectiveness of the highly inefficient Federal Board of Revenue (FBR).
The IMF on Thursday released the staff-level report for the second review of the $7 billion bailout package, which disclosed that the lender has imposed 11 additional conditions on Pakistan. With the fresh additions, the total number of conditions has risen to 64 in the short span of one and a half years.
According to the report, Pakistan will publish on a government website the asset declarations of high-level federal civil servants by December next year. The purpose is to identify mismatches between income and assets.
The report stated that the government also plans to expand this obligation to high-level provincial civil servants and allow banks full access to their declarations.
By October next year, Pakistan will publish an action plan to mitigate corruption vulnerabilities in 10 identified departments based on institutional-level risk assessments. The National Accountability Bureau will lead and coordinate the development of action plans for agencies identified as facing the highest risks.
To strengthen provincial capacities to mitigate corruption risks, provincial anti-corruption establishments will be empowered to receive financial intelligence and continue receiving capacity-development support for financial investigations of corruption offences within their jurisdiction.
The IMF's new conditions followed the publication of the Governance and Corruption Diagnostic Assessment report, which exposed deep weaknesses in Pakistan's legal and governance systems.
ghazi52
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The IMF has also instructed Pakistan to complete a comprehensive assessment of remittance costs and structural impediments to cross-border payments, complemented by an action plan by May next year.
The condition comes after remittance costs were projected to rise to $1.5 billion in the next couple of years. Remittances remain the single largest source of financing Pakistan's contained imports.
By September next year, the government will conduct a comprehensive study of bottlenecks hindering local currency bond market development and publish a strategic action plan to address required improvements.
To break the elite capture of the sugar industry, the IMF has imposed a condition requiring the federal and provincial governments to agree and the federal cabinet to adopt a national policy for sugar market liberalisation by June next year.
The policy must include recommendations on licensing, price controls, import and export permissions, zoning, and clear implementation timelines.
The FBR's poor performance has also triggered new conditions. The IMF has asked the government to finalise a roadmap by end-December to prioritise reforms; assess staffing requirements and roles; set timelines and milestones; estimate revenue impacts; and determine key performance indicators (KPIs) to monitor progress.
Based on this roadmap, the government must complete all actions necessary to fully implement at least three priority areas agreed with IMF staff, including any required subordinate legislation, staff hiring and allocation, and initial KPI reporting.
The condition comes after remittance costs were projected to rise to $1.5 billion in the next couple of years. Remittances remain the single largest source of financing Pakistan's contained imports.
By September next year, the government will conduct a comprehensive study of bottlenecks hindering local currency bond market development and publish a strategic action plan to address required improvements.
To break the elite capture of the sugar industry, the IMF has imposed a condition requiring the federal and provincial governments to agree and the federal cabinet to adopt a national policy for sugar market liberalisation by June next year.
The policy must include recommendations on licensing, price controls, import and export permissions, zoning, and clear implementation timelines.
The FBR's poor performance has also triggered new conditions. The IMF has asked the government to finalise a roadmap by end-December to prioritise reforms; assess staffing requirements and roles; set timelines and milestones; estimate revenue impacts; and determine key performance indicators (KPIs) to monitor progress.
Based on this roadmap, the government must complete all actions necessary to fully implement at least three priority areas agreed with IMF staff, including any required subordinate legislation, staff hiring and allocation, and initial KPI reporting.
ghazi52
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By December next year, the government must also develop and publish a comprehensive medium-term tax reform strategy, including a sequenced roadmap of tax policy, administration and legal reforms, clear governance arrangements, and a resource plan for implementation.
By the same deadline, the government will finalise preconditions for private-sector participation in HESCO and SEPCO and sign public service obligation (PSO) agreements with each of the seven largest entities before the next budget is submitted to Parliament.
The government will also prepare and submit to Parliament amendments to the Companies Act, 2017 to strengthen compliance for unlisted firms, modernise corporate governance structures and align regulations with international best practices.
It will also publish a concept note outlining the scope, objectives and expected outcomes of proposed amendments to the SEZ Act, including the rationale for reform and KPIs.
The government has agreed to the need for a mini-budget if revenues fall short of expectations by end-December 2025, according to the IMF. The measures would include raising federal excise duty on fertilisers and pesticides by 5%, imposing excise duty on high-value sugary items and broadening the sales tax base by moving select items to the standard rate.
The IMF has also extended the deadline to publish an action plan to address vulnerabilities highlighted in the Governance and Corruption Diagnostic report.
By the same deadline, the government will finalise preconditions for private-sector participation in HESCO and SEPCO and sign public service obligation (PSO) agreements with each of the seven largest entities before the next budget is submitted to Parliament.
The government will also prepare and submit to Parliament amendments to the Companies Act, 2017 to strengthen compliance for unlisted firms, modernise corporate governance structures and align regulations with international best practices.
It will also publish a concept note outlining the scope, objectives and expected outcomes of proposed amendments to the SEZ Act, including the rationale for reform and KPIs.
The government has agreed to the need for a mini-budget if revenues fall short of expectations by end-December 2025, according to the IMF. The measures would include raising federal excise duty on fertilisers and pesticides by 5%, imposing excise duty on high-value sugary items and broadening the sales tax base by moving select items to the standard rate.
The IMF has also extended the deadline to publish an action plan to address vulnerabilities highlighted in the Governance and Corruption Diagnostic report.
Fatman17
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ghazi52
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- #248
IMF projects Pakistan GDP and trade outlook through 2030
Revised forecasts show slower export growth, rising imports, and fiscal challengesIrshad Ansari
December 17, 2025
The International Monetary Fund has projected that Pakistan’s Gross Domestic Product could reach Rs193,630 billion by 2030, while exports are expected to rise to $46 billion, significantly lower than the government’s target of $60 billion. For the next fiscal year, Pakistan’s total exports are estimated at $36.46 billion, with exports expected to reach $40 billion in 2028 and approximately $43 billion in 2029.
The IMF released these revised projections as part of changes to Pakistan’s key economic indicators framework. Sources indicate that, according to IMF estimates, Pakistan’s GDP size will increase by about Rs68,000 billion cumulatively from fiscal year 2026 to 2030. However, the GDP target of Rs129,517 billion set for the current fiscal year is unlikely to be met, with the GDP now expected to reach approximately Rs126,000 billion.
On tax revenue, the IMF noted that the Federal Board of Revenue is unlikely to achieve a tax-to-GDP ratio of 15% even by 2030. The ratio is projected at 11.2% in the next fiscal year and may decline to 11.1% between 2028 and 2030. The FBR is expected to collect Rs13,979 billion in taxes this fiscal year, increasing to around Rs21,500 billion by 2030, while non-tax revenue is projected at Rs3,681 billion this year and may reach Rs3,861 billion by 2030.
SoulSpokesman
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ghazi52
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Pakistan’s central bank reserves hit 3.9-year high on IMF inflow
- State Bank of Pakistan received $1.2bn tranche from International Monetary Fund last week
The foreign exchange reserves held by the State Bank of Pakistan (SBP) surged by $1.3 billion in a single week to reach a 3.9-year high, buoyed by the recent loan tranche disbursed by the International Monetary Fund (IMF), data from the central bank showed on Thursday.
The SBP reserves jumped to $15.89 billion as of December 12, 2025, after the central received $1.2 billion from the IMF under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).
The central bank’s FX reserves stood above $15 billion last time during the week ended on March 11, 2022. During this time, the reserves fell to an alarming level of $2.9 billion in February 2023.
Meanwhile, the country’s total reserves stood at $21.09 during the week ended December 12, 2025. The reserves held by the commercial banks were recorded at $5.20 billion.
hydrabadi_arab
Trusted Member
IMF export target are much more realistic then retarded dreams that failed planning of minister Ahsan Iqbal have been selling since CPEC 2014 IPPs debt trap.
Pakistan will do well to reach IMF export target looking at current FY performance. Only being saved by remittances and service exports along with low oil prices.
Ahsan Iqbal, lets keep everything as it is and then give up BS export target by 2030 to keep military establishment happy.
ghazi52
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IMF sees Public Sector Development Programme shrinking as defence outlay to rise
Khaleeq Kiani
December 27, 2025
ISLAMABAD: Amid improving fiscal space, the International Monetary Fund (IMF) has projected a declining Public Sector Development Programme (PSDP), rising defence spending and generally stabilising interest payments from the current year onwards through the fiscal year 2030.
IMF projections show that interest payments for the last fiscal year (FY25) were originally estimated at 7.7 per cent of GDP but ended at 7.8pc. For the current year, the Fund has revised its estimate to 6.5pc of GDP from 6.7pc in view of lower policy rates.
For the next fiscal year (FY27), markup payments are estimated to drop further to 5.9pc of GDP, to be followed by 5.2pc of GDP in FY28, 5.1pc in FY29 and finally settling at 4.8pc in FY30 amid falling policy rates and resultant lower debt payments.
In absolute numbers, interest payments are estimated to slightly decline to Rs8.225 trillion during the current year, down from Rs8.88tr at the close of FY25. This would remain almost static around Rs8.2tr in FY27 and FY28 and then increase to Rs8.8tr and Rs9.3tr in FY29 and FY30.
ghazi52
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The national economy, measured by nominal GDP, has been estimated at Rs126tr for the current year, Rs140.7tr next year, Rs156.5tr in FY27, Rs174tr in FY29 and then Rs194tr in FY30.
But despite these improving debt servicing-to-GDP indicators, PSDP would continue to struggle both in absolute numbers and as a share of GDP.
Based on detailed interactions with the government as part of the second review of its $7 billion Extended Fund Facility, the IMF said the PSDP expenditure, originally estimated at 0.9pc of GDP in FY25, had been contained to 0.7pc to make up for the revenue shortfalls. The PSDP has been estimated to stay unchanged at 0.7pc for the current year.
Alarmingly, the PSDP has been projected to fall further to 0.6pc of GDP next year and then stay unchanged through FY30.
Even in absolute terms, the IMF has worked out PSDP spending for the current year at Rs873bn for the current year against its original estimate of Rs1.065tr. It would remain around the same level, ie Rs885bn, in FY27 and slightly improve to Rs984bn in FY28, Rs1.1tr in FY29 and Rs1.2tr in FY30.
Conversely, the size of defence expenditure would make a comeback both in absolute terms and as a share of the national economy.
The IMF said the defence budget had declined from 2.4pc of GDP in FY21 to 1.8pc in FY24 and then slightly recovered to 1.9pc last year. For the current fiscal year, the defence expenditure has been projected to increase further to 2pc of GDP this year and then maintain this share all along until FY30.
In absolute numbers, the defence budget has been on an upward journey — rising from Rs1.3tr in FY21 to Rs2.2tr in FY25, showing a cumulative increase of 67pc in four years.
This will keep growing to Rs2.57tr during the current year, followed by Rs2.87tr next year and Rs3.2tr in FY28. The defence expenditure would further go up to Rs3.56tr in FY29 and then Rs3.96tr in FY30, showing a cumulative increase of more than 80pc against FY25 spending.
