Pakistan, IMF made made 'considerable' progress in several areas

Pakistan and the International Monetary Fund (IMF) have made ‘significant’ progress toward reaching a Staff Level Agreement (SLA) on the first review under the 37-month Extended Arrangement under the Extended Fund Facility (EFF), the Washington-based lender said in a statement.

“An International Monetary Fund (IMF) team, led by Nathan Porter, visited Islamabad and Karachi from February 24 to March 14, 2025, to hold discussions on the first review of Pakistan’s economic program supported by the Extended Fund Facility (EFF) and on a possible new arrangement under the IMF’s Resilience and Sustainability Facility (RSF),” the IMF statement read.

Nathan Porter said, “Program implementation has been strong, and the discussions have made considerable progress in several areas including the planned fiscal consolidation to durably reduce public debt, maintenance of sufficiently tight monetary policy to maintain low inflation, acceleration of cost-reducing reforms to improve energy sector viability, and implementation of Pakistan’s structural reform agenda to accelerate growth, while strengthening social protection and rebuilding health and education spending.

Nathan Porter said that trogress has also been made in discussions on the authorities’ climate reform agenda, which aims to reduce vulnerabilities from natural disasters-related risks, and accompanying reforms which could be supported under a possible arrangement under the Resilience and Sustainability Facility (RSF).

“The mission and the authorities will continue policy discussions virtually to finalize these discussions over the coming days. The IMF team is grateful to the Pakistani authorities, private sector, and development partners for fruitful discussions and their hospitality throughout this mission,” the IMF team leader said.

Earlier, the IMF urged Pakistan’s Special Investment Facilitation Council (SIFC) to refrain from granting tax exemptions to international investment projects, including the Chaghi-Gwadar railway track project worth $2 billion.

According to sources, the IMF delegation maintained that tax exemptions for international investments would hinder the country’s revenue generation.

The government had requested Gulf countries to invest in the Chaghi-Gwadar railway track project, but the IMF has refused to grant tax exemptions to the SIFC for international investments. The SIFC has been providing a platform for investment and facilitating the transportation of minerals from Reko Diq to Gwadar through a new railway line.

Briefing the IMF delegation, officials stated that a platform is being provided to facilitate investment, and a new railway line will be constructed to transport minerals from Reko Diq to Gwadar.

The government has sought investment from Gulf countries worth $2 billion for the construction of a railway track from Chaghi to Gwadar. The Ministry of Finance, Railways, and SIFC have conducted a feasibility study for the project.