Islamabad, Nov 13: IMF Considers Return to Quarterly Reviews Amid Pakistan’s Target Challenges. The International Monetary Fund (IMF) is considering a return to a quarterly review system for Pakistan’s $7 billion bailout program due to initial challenges faced by the program.
A decision has not yet been made, but this adjustment would enable more effective monitoring of nearly 40 program conditions, according to the Express Tribune. In July, the IMF board sanctioned the bailout with an initial disbursement of $1.1 billion. The remaining funds are set to be released in six biannual tranches contingent upon the successful completion of reviews.
The first review was originally planned for March of next year; however, it has been moved forward due to issues with fiscal, tax, and external financing. Pakistan’s earlier program also utilized a quarterly review format, allowing the IMF to ensure stricter compliance.
Despite higher withholding rates, the IMF has expressed worries regarding the Federal Board of Revenue’s insufficient tax collection from the real estate sector. Additional issues relate to the National Fiscal Pact, where provincial governments, especially Punjab, have not yet enacted the necessary agriculture tax legislation. This deadlock affects the fiscal surplus goal.
The lender is anticipated to offer technical assistance to ensure the full implementation of the pact, aiming to align provincial spending with constitutional obligations.
