Pakistan is likely to receive a tranche of $1.2 billion from the IMF today

After a long wait, today is the day that Pakistan has been eagerly waiting for. The IMF Executive Board is holding an important meeting today in which it is likely to approve Pakistan’s third economic review and release the next tranche of $1.2 billion. According to sources, Pakistan has already fulfilled all the important conditions of the IMF, which has paved the way for the approval of the tranche. The Staff Level Agreement between Pakistan and the IMF was signed on March 27 this year.

Today’s meeting is expected to approve not only this tranche but also the second review of the Resilience and Sustainability Facility (RSF) program related to climate change, under which Pakistan is likely to get another $200 million.

On the financial front, government sources say that the petroleum levy collections may exceed the set target of Rs1468 billion and further increase in the levy is also under consideration. On the other hand, the IMF has demanded reduction of subsidies in various sectors including energy, which is a worrying aspect for the common man.

The government maintains that inflation has come down and economic indicators are improving, but economic uncertainty due to Middle East tensions has not yet fully abated. The government has also assured the IMF of maintaining fiscal discipline.

Significant progress was also made on Climate Financing during the global financial meetings in Washington, and Pakistan presented its position on climate action, budget priorities, and environmental projects. The government has also indicated that it will give more importance to Climate Policy in the national budget.