US Ambassador Pledges Support For Pakistan’s IMF Program

US Ambassador Donald Blome met with Pakistan’s Finance Minister Muhammad Aurangzeb, assuring support for the ongoing $3 billion International Monetary Fund (IMF) loan program. The statement from the US Embassy in Islamabad comes amidst negotiations between Pakistan and the IMF for the final review of the loan program, secured by Islamabad last year.

Pakistan claims to have met all targets set by the IMF, with a successful review expected to release the remaining $1.1 billion. Ambassador Blome discussed US cooperation and support for Pakistan’s reform efforts, particularly in tax administration and improving the investment climate.

Read more: Pakistan And IMF Loan Talks Inconclusive

The IMF review, initially scheduled to conclude on Monday, has been extended by a day due to incomplete agendas. Pakistani financial authorities briefed the IMF mission on annual taxation targets, subsidy abolition, tax system digitization, and tax net expansion. Pakistan aims to secure a new loan under the Extended Fund Facility (EFF) program.

Currently, Pakistan faces challenges in digitizing taxation and bringing over 3 million retailers into the tax net. Efforts are underway, with the FBR signing a memorandum for digitization and work ongoing to include retailers in the tax net.

Pakistan secured the $3 billion IMF program in June last year after narrowly avoiding sovereign default. The economy has faced significant stress, characterized by low reserves, a balance of payment crisis, high inflation, policy interest rates, and currency depreciation due to corruption and financial mismanagement.