Pakistan, IMF begin talks on fourth EFF review, climate programme

Finance Minister Senator Muhammad Aurangzeb on Tuesday began negotiations with the International Monetary Fund (IMF) mission for the fourth review of Pakistan’s $7 billion Extended Fund Facility (EFF) and the third review of its climate-focused programme.

The IMF mission, led by Iva Petrova, is in Islamabad for discussions on the EFF arrangement and the Resilience and Sustainability Facility (RSF).

Aurangzeb and the IMF delegation held preliminary discussions on key issues linked to the ongoing reviews.

A successful review could lead to an IMF Executive Board recommendation for the release of about $1.2 billion through two tranches under the EFF and RSF programmes.

Pakistan received $1.32 billion from the IMF in May after the Fund’s Executive Board completed the third EFF review.

Pakistan’s 37-month EFF programme was approved on September 25, 2024, with the aim of strengthening economic resilience and supporting sustainable growth.

Its key priorities include maintaining macroeconomic stability, rebuilding foreign exchange reserves and broadening the tax base.

Asset declarations

The IMF mission spent the previous week in Karachi, where it discussed monetary policy, inflation and exchange-rate issues with senior officials of the State Bank of Pakistan.

After arriving in Islamabad, the mission was briefed on the digitisation of the Asset Declaration Scheme for federal civil servants.

Under the scheme, around 10,000 federal government employees will be required to declare their assets by October 30.

Officials from the Establishment Division and Federal Board of Revenue briefed the IMF on the digitisation process under Section 15-A of the Civil Servants Act 1973.

The digitised asset declarations are expected to be published by December 2026 or January 2027.

Provincial government employees are not currently covered by the scheme.

Revenue collection

FBR officials also briefed the IMF mission on projected revenue collection for the July-September quarter of the current fiscal year.

Officials attributed some revenue pressure to higher fuel prices and slower economic activity linked to disruptions around the Strait of Hormuz.

According to preliminary FBR estimates, the ongoing conflict has resulted in revenue losses of around Rs144 billion.

The FBR nevertheless expects to meet the first-quarter revenue collection target of Rs3.053 trillion by September 30.

Tax collection is estimated at around Rs1.33 trillion against the monthly target of Rs1.343 trillion, which officials said would still allow the tax authority to meet the quarterly target.