Pakistan, IMF near deal on review, $1.2bn disbursement in sight

Mettis Global reported that Pakistan and the IMF are nearing the end of talks on the most recent review of the country's economic programme, with the conclusion expected by October 7. Completing the review would clear the way for the Fund to recommend about $1.2 billion in disbursements under the current arrangement. Most agreed targets have been met, and nine items remain open as the two sides enter the final stage.

Revenue has been a major positive in the review, with the Federal Board of Revenue collecting Rs3,043 billion during July to September, which met the first-quarter target. The IMF is reportedly confident the full-year tax goal can be reached without new tax measures, lessening the chance of a mini-budget this fiscal year. The Fund was also pleased with how the government is putting its economic policies into effect and with Finance Minister Muhammad Aurangzeb's performance.

Electric vehicle taxation remains open, with a proposal to lift sales tax on them from 1% to 18% due for final talks. Separately, the government has briefed the Fund on its drive to sell off three power distribution firms, and expressions of interest have come in for the planned transactions. Authorities have also assured the Fund that a fresh National Finance Commission award will be completed after December. After outstanding points are resolved, the mission would make its recommendation, and formal Fund approval would follow.