ISLAMABAD: Pakistan has met the majority of its performance benchmarks under the International Monetary Fund (IMF) programme, raising expectations for approval of a $1.2 billion tranche under the ongoing loan arrangement.
According to officials, Pakistan achieved 13 out of 17 quantitative targets set under the programme by December 2025, a development seen as supporting continuity of the IMF programme and improving external financing prospects.
Sources said the International Monetary Fund staff has submitted its review report to the Executive Board, with a decision on the next tranche expected in May 2026. The tranche is part of the $7 billion Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF).
Targets achieved and gaps
Key macroeconomic targets were met, including limits on the State Bank of Pakistan’s net international reserves, net domestic assets, and foreign exchange positions. The government also remained within its primary budget deficit target and maintained control over external payment arrears.
Provincial tax revenues reached the target level, while ceilings on government guarantees, tax refunds, and power sector liabilities were also observed. The State Bank did not extend borrowing to the government during the review period.
However, two targets were not achieved, and data for two others could not be provided. The Federal Board of Revenue was unable to share required data on income tax collection from retailers and the addition of 500,000 new tax filers.
Outlook and upcoming targets
Authorities have agreed to a new set of economic targets through June 2026. The central bank’s net foreign exchange reserves target has been revised, with expectations of improvement in the next fiscal year.
The government has committed to reducing the fiscal deficit further and increasing the tax base, including adding one million income tax filers by the end of the current fiscal year and an additional 750,000 by March 2027.
Officials said the IMF staff assessment reflects overall progress, but emphasised that further reforms are needed, particularly in tax collection and documentation of the economy.
Also read: Pakistan, IMF finalise 11 reform targets for FY2026-27
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