Pakistan Hits 25 IMF Targets, Navigates Political Uncertainty Fitch Ratings Analysis

According to a report compiled by the finance ministry, Pakistan has achieved 25 targets of the international lender, the sources said and added that a report has been dispatched to the IMF.

The condition set by the IMF not to take loans from the SBP was fulfilled, while the payment of the international loans was also made on time.

Tax refunds and power sector pending payments were also made on time by Pakistan, the report said. The condition not to give tax amnesty and exemption was also met.

The condition to jack up electricity and gas prices was also met. Pakistan is optimistic about completing the remaining target before the IMF team arrives in Islamabad, the sources said.

Earlier this week, Fitch Ratings said, that the close outcome of Pakistan’s election and resulting near-term political uncertainty may complicate the country’s efforts to secure a financing agreement with the IMF, to succeed the Stand-By Arrangement (SBA) expiring in March 2024.

The credit rating agency says that a “new deal” is key to the country’s credit profile, and we assume one will be achieved within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default.