Revenue surge, subsidy plans sit well with IMF

Pakistan has moved to a more positive footing in ongoing talks with the International Monetary Fund, according to Dawn, on the back of strong revenue collection and a readiness to move electricity subsidies fully onto the Benazir Income Support Programme (BISP) system. An IMF mission headed by Iva Petrova ended its talks on Wednesday with officials from the Federal Board of Revenue, where sources said the country beat its first quarter revenue goal by a sizeable margin despite a difficult external backdrop.

A separate session with BISP officials reviewed a committed lift of about 25 per cent in cash transfers and a plan to shift power sector subsidies from consumer tariffs to targeted BISP disbursements by January 2027. Further details from the power division on removing the electricity tariff subsidy are due soon. The World Bank is assisting in tying power users to a national socioeconomic registry, with eligibility rules anticipated by late November.

An IMF structural benchmark calls for this overhaul by early 2027, swapping cross-subsidies for a targeted scheme for low-income households. The lender also wants the premier's fuel subsidy routed via BISP, while the government has committed to safeguarding vulnerable groups against food and fuel price swings by raising BISP's unconditional cash transfer to Rs18,000. Ahead of the IMF board's review of the $1.2bn tranche and waivers for end-June 2026 slippages, several procedural steps may need completing.