IMF talks begin with reform gaps

According to The Express Tribune, the IMF began its talks in Karachi with Pakistan posting gains on fiscal and monetary indicators, progress that could open the way to loan disbursements. The country nonetheless fell short on several conditions, including higher spending on education and healthcare and governance reforms. An Article-IV consultation, a broader review of the economy's health, also started on Wednesday.

Officials said the mission will travel to Islamabad from September 28 if the capital remains open, and a successful outcome would lead to a board recommendation on $1.2 billion across two tranches. The IMF still has concerns about slow reforms at state-owned enterprises, continued market interventions and statistical discrepancies of Rs853 billion in the budget. Pakistan beat the primary surplus target, but it missed the health and education spending limit by Rs370 billion against a Rs3.47 trillion goal.

The government has not fully tabled bills to amend the laws of 10 SOEs, and a Sovereign Wealth Fund Act amendment has gone to parliament without approval. A sugar market liberalisation policy also remains outstanding, while gas and electricity price adjustments were made on time. Sources flagged property sector taxation and fake withholding tax payments found in Multan as one of the outstanding matters.