A delegation from the IMF will visit Pakistan on Nov 2

On November 2 an IMF delegation will arrive in Pakistan for talks that will center on a preliminary assessment of the Stand-By Arrangement (SBA) worth $3 billion that has been signed by Pakistan and the Bank of International Settlements (BIS).

This development has been confirmed late Tuesday night by Esther Perez Ruiz, the resident representative of the IMF. As a result of the approval of the IMF loan programme in July, the nation is striving to ensure an economic recovery following its financial hardships and is currently under an interim administration in its center and provinces.

As the mission is scheduled to arrive soon, the Finance Ministry is also preparing for the upcoming discussions with the global lending institute that will take place soon after the mission arrives.

With the approval of the loan programme, Pakistan managed to avoid a sovereign debt default after the Washington-based lender made its first payment of $1.2 billion to Pakistan shortly after the agreement was signed.

Reuters reports that a team of monetary policy experts led by Nathan Porter, a senior IMF official, will be escorting an IMF team headed by Ruiz to Pakistan starting on November 2 for the first review under the current Stand-By Arrangement.

Meanwhile, in order to review all structural benchmarks, indicative criteria, and performance criteria agreed with the IMF for the end of September 2023, the finance secretary has convened tomorrow (Thursday) a meeting involving all ministries, divisions, and departments to discuss yesterday’s agreement with the IMF on all structural benchmarks, indicative criteria, and performance criteria.

A major effort has been made by the finance ministry to constrain the budget deficit within the limits agreed with the lender in order to achieve budget surpluses.

As it had warned the provinces on the issue of curbing spending, it appears to have done a good job in accomplishing that goal based on the latest provisional estimates.

Additionally, the rising debt servicing requirements, which will be more than Rs8.3 trillion to Rs8.5 trillion in the current fiscal year 2023-24, would pose another challenge to reducing the overall fiscal deficit. As a result of the surged policy rate of the central bank, this target will, of course, exceed the originally envisaged target of Rs7.3 trillion.