An IMF mission has arrived in Pakistan to conduct the second review of the country’s economy under the $7 billion loan program.
Initial technical talks are scheduled to begin today, while formal discussions will start on September 29 due to Finance Minister Muhammad Aurangzeb’s visit to the United States. Officials from the Finance Ministry, State Bank, and FBR will hold preliminary meetings with the IMF team ahead of formal negotiations.
The IMF delegation will stay in Pakistan for two weeks, engaging in both technical and policy-level discussions. The next $1 billion tranche of the loan will be released after the second review is successfully completed.
Islamabad has requested that the IMF provide flexibility in loan conditions due to the ongoing floods. The government plans to fund relief measures without introducing a mini-budget. Instead, it proposes a flood levy and the use of funds already allocated under the emergency budget. Only the federal government will access levy revenue, while provincial governments must raise additional funds for flood-related expenses.
For the current fiscal year, Pakistan has earmarked Rs389 billion for emergency spending, an increase from Rs223 billion last year. The IMF has asked for detailed accounts of these expenditures before considering any relief package.
Ahead of the IMF visit, the government also allowed the commercial import of used vehicles, meeting a major IMF condition. Initially, five-year-old vehicles will be allowed until June 30, 2026, with importers paying a 40% additional tax alongside customs duties. From July 1, 2026, the age limit will be removed, and duties will gradually decrease until FY 2029-30.
The IMF mission will also review Pakistan’s fiscal targets, climate change measures, and EFF performance. Officials say Pakistan has met most IMF targets, raising optimism for a successful review. Revenue will be increased through tax enforcement instead of new levies, ensuring financial stability without overburdening citizens.
In other related news also read Pakistan Govt Challenges Draft Corruption Report By IMF Authorities
