Pakistan Receives Second Tranche Of 1.023 Billion From IMF; Holds Discussion About Budget

The International Monetary Fund (IMF) has released a second tranche of $1.023 billion to Pakistan under the Extended Fund Facility (EFF), the country’s central bank said on Wednesday.

The disbursement came on the same day the IMF began virtual talks with Pakistan on its upcoming budget. The IMF delayed its mission’s visit to Islamabad due to regional security concerns. The federal government plans to present the budget for fiscal year 2025–26 on June 2.

The IMF talks will continue until May 16. The central bank said the released amount will be added to its foreign exchange reserves for the week ending May 16.

The IMF stated that Pakistan’s policy measures under the EFF had stabilised the economy and restored confidence amid global uncertainty.

Fiscal performance has remained strong. A primary surplus of 2 per cent of GDP was achieved in the first half of FY25. This keeps Pakistan on track to reach the 2.1 per cent target. The gross reserves stood at $10.3 billion at the end of April, up from $9.4 billion in August 2024. Reserves are projected to rise to $13.9 billion by June 2025 and continue to grow in the medium term.

IMF Monitoring Budget Commitments

The proposed tax target for the Federal Board of Revenue (FBR) is 11 per cent of GDP or Rs 14.3 trillion. The IMF will assess whether the government has credible plans to meet this goal, sources said.

The IMF has set several fiscal conditions. Their successful implementation has helped maintain programme momentum despite earlier delays. Pakistan met IMF targets for a federal primary surplus, net revenue collection, and cash surpluses by the provinces. Against a Rs 2.7 trillion primary surplus target, the federal government reported a Rs 3.5 trillion surplus or 2.8 per cent of GDP.

The federal budget size remains tentative due to a review of defence spending. The government aims to present a budget of under Rs 18 trillion. The projected overall budget deficit, after including provincial surpluses, stands at 5.1 per cent of GDP or Rs 6.7 trillion, sources said.

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