Islamabad: Pakistan’s economic team led by Iva Petrova, led by Iva Petrova, held a formal kickoff meeting to review implementation $7 billion in extended financing facilities (EFF) and $1.1 billion in Resilience and Sustainability Facilities (RSF).
Plan performance as of the end of June 2025 is mixed together. The start of the next review period from December to December has also been out of the market, especially in revenue. Now, both sides must reach a consensus on corrective measures during the dialogue to achieve the next boy’s goal.
The opening meeting was attended by key economic stakeholders, including the governor of Pakistan, the minister of finance and the chairman of the Federal Taxation Bureau (FBR).
While the electricity sector benchmark at the end of June 2025 is very comfortable, revenues are less than about Rs 12 crore, with a maximum of 1% GDP in the previous fiscal year, while the first two months of the current fiscal year showed similar shortages.
The mission will remain in Pakistan for nearly two weeks and will also have forward-looking discussions with the authorities to promote faster implementation of the targets at the end of December 2025.
Pakistan has also stagnated about $6 billion in fresh investment to upgrade refinery as the IMF’s long-term implementation of the Brownfield oil refinery policy. Officials believe this demand is aligned with the RSF’s goals, as the upgrade will help produce petroleum products that meet European standards with minimal carbon and sulfur emissions.
The policy was negotiated with the industry about two years ago, which is signing a binding contract. However, under the International Monetary Fund plan, authorities promise not to grant any tax exemptions to the promised refineries. As a result, although petroleum products are exempt from business taxes, the equipment, materials and materials required are still subject to business taxes and other duties without the need for automatic adjustments, causing serious cash flow problems for the refinery.
The Petroleum Division believes that existing refinery products are harmful to the environment during both refining and consumption, posing health risks and worsening climates.
Officials said that while the government has been seeking RSF funding for various projects, the country has been lost due to outdated refining technology due to what they call a “technical misunderstanding” between the IMF, the Ministry of Finance and the FBR. “This is a simple distortion that can be solved through reasonable conversations,” one official said.
At the same time, the government requires the IMF to consider Flood loss Sources say the review is based on pre-liquefaction goals when assessing the performance of the program. Therefore, authorities remain responsible for performance ending in June 2025, although relaxation can be considered based on verifiable estimates of flood damage.
FBR officials believe inflation was higher in the second quarter and increased recovery from the final stage of litigation cases, and their first-quarter revenue shortage could be offset.
The government reportedly used Rs 390 crore of natural disaster and emergency budget allocation in 2025-26 to clear past dues of Rs 13 billion, which were attributed to commercial banks, to obtain incentives and festivals to cover the costs of attracting remittances through banking channels. Now, authorities will have to pay these payments from the contingency fund when relaxing from the IMF octopus relaxation. Furthermore, despite estimates that for this purpose, the Government has not allocated any funds for such incentives in the budget for that year.
Sources said the authorities were because the IMF relaxed the conditions for basic budget surplus and fiscal deficits to create space for flood-related spending without the need to impose new taxes or reduce development spending.
Authorities missed the FBR revenue targets, as well as tax targets for retail and provincial cash surpluses at the end of June 2025 and could face tough times in negotiations.
The government has not released a government and corruption diagnosis report, which is still being reviewed and published. As a result, the relevant governance action plans stagnated. Similarly, the laws related to the governance of state-owned enterprises (SOEs) do not meet the commitments to the International Monetary Fund.
Although the authorities successfully enacted agricultural income tax laws in all provinces on time, their implementation and collection are restricted to the uncertainty of September – OCT-REMAIN, especially due to the ongoing flooding in Punjab and Synh. Therefore, the scale of support required for the flood-affected population, sectors and facilities remains unclear.
On the positive side, Pakistan has almost all quantitative performance standards by the end of June 2025. However, it lags behind indicative goals and structural benchmarks, which may impact future planning implementation. In view of biennial comments on the $7 billion EFF and $1.1 billion RSF, both parties will have to reach consensus on past performance and forward-looking implementation plans.
After successful completion of the review, Pakistan will be eligible to pay approximately US$1 billion (US$760 million special painting rights) by the end of next month.
Posted at Dawn on September 30, 2025
