September 27, 2020

Concluding the first quarterly review of the $6 billion Extended Fund Facility (EFF), the IMF delegation officials expressed satisfaction over the country’s performance. Pakistan’s officials are confident that the second payment of $498 million of the total $6 billion EFF facility would be released soon.

According to government officials, the IMF delegation appreciated the SBP’s policies and wanted the SBP to maintain them in the short-to-medium-term period as well. The IMF officials said that the government should avoid giving any tax exemptions and take steps to centralize the tax collection mechanism. The IMF officials said that neither the revenue target and nor the tax collection target would be revised and the program is going smoothly for Pakistan to achieve these targets. A government official told Dawn that, “Neither the tax target got revised nor waivers sought or required.”

Under the program, the IMF would review the government’s performance on six criteria, relating to following steps:

  • International reserves
  • Net assets of central bank
  • SBP’s stock of net foreign currency swaps and forward position
  • Primary budget deficit
  • No government borrowings from the central bank
  • Ban on government guarantees

Pakistan’s performance would also be scrutinized based on the following activities:

  • Disbursement of funds under Benazir Income Support Program.
  • Government spending on Health and Education.
  • Tax collections.

Muhammad Asad

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