In an uncertain political situation, the International Monetary Fund has sent a review mission to assess Islamabad’s performance in implementing a bailout package. Pakistan is optimistic to receive the next tranche of approximately $460 million.
The government’s position on six performance criteria in terms of fiscal and monetary policy objectives and two continuous performance criteria for the period of July to September 2019 remains satisfactory.
However, it did not fare well on the indicative targets related to tax revenues and decommissioning, as well as the structural benchmarks for reporting of regulatory duties and the monitoring and prosecution of licensing regimes for tobacco sectors.
The first tranche of $1 billion has already been released. After the successful completion of the initial review discussions and subsequent approval by the Executive Committee, the IMF will approve the second tranche of 328 million Special Drawing Rights, or $ 460 million, at the current value of the SDR basket.
The IMF mission will review Pakistan’s performance on the basis of six performance criteria, NIRs, NDA, net foreign exchange position, primary budget deficit target, central government net borrowing from the central bank, and government guarantees refer issued by the government.
Pakistan’s $18.5 billion NIR target for late September remains satisfactory as the IMF set a very simple target. The govt also met two additional performance criteria in connection with recruiting the central bank and issuing government guarantees. The two continuous performance criteria are zero new debt at the central bank and zero accumulation of public sector arrears. Pakistan has fulfilled both these conditions.
Although, economic leaders failed to meet IMF conditions to collect Rs. 1.071 trillion in tax revenue from the Federal Revenue Service. The FBR missed its tax target for the first quarter by Rs 108 billion and It gave only Rs 30 billion in tax refunds.