Pakistan held talks with a visiting IMF team to review economic targets for the third loan tranche. Officials highlighted losses from recent flooding, which disrupted provincial budgets. Provinces requested revisions, arguing that the disaster prevented meeting surplus goals set for the fiscal year.
The IMF’s $7 billion Extended Fund Facility requires provincial surpluses of Rs1,464 billion. However, floods derailed progress, prompting urgent discussions.
Flood-affected provinces cited massive damages as the reason for shortfalls. Here’s a quick overview:
| Province | Target Surplus (Rs Billion) | Status Update |
|---|---|---|
| Punjab | 740 | Unable to achieve due to flood losses |
| Sindh | 370 | Requested IMF review |
| Khyber Pakhtunkhwa (KP) | 220 | Conditioned on full federal tax share |
| Balochistan | 150 | Impacted by floods |
Sources confirm that KP, Punjab, and Sindh missed their primary surpluses due to the floods. KP insists on receiving all federal tax shares before committing to its target.
The floods exacerbated Pakistan’s fiscal pressures. The government aims to secure the third tranche amid recovery needs. Officials briefed the IMF on damages, emphasising the need for flexibility.
Read: Pakistan’s Banking Sector Secures Rs1.225 Trillion Circular Debt Resolution
These talks occur at the policy level, focusing on sustainable adjustments. The IMF team will assess impacts before finalising the review.
