Islamabad: Pakistan has failed to meet three of the five targets set by the International Monetary Fund (IMF) for the second review of its $7 billion bailout package, according to a recent fiscal operations summary from the Ministry of Finance, as reported by The Express Tribune.
The Federal Board of Revenue (FBR) missed two critical goals for the fiscal year ending June: collecting PKR 12.3 trillion in total revenue and PKR 50 billion from retailers under the Tajir Dost Scheme. Additionally, the provinces failed to achieve the targeted PKR 1.2 trillion cash surplus, generating only PKR 921 billion—a shortfall of PKR 280 billion—due to increased expenditures.
Despite these setbacks, Pakistan achieved a primary budget surplus of PKR 2.7 trillion, or 2.4% of GDP, exceeding the IMF’s target of PKR 2.4 trillion. This marks the second consecutive year of a primary surplus and the highest in 24 years. The four provinces also met their collective revenue targets.
The overall fiscal deficit was reduced to 5.4% of GDP (PKR 6.2 trillion), better than the IMF’s 5.9% target, with the Finance Ministry maintaining strict control over expenditures. However, federal net revenues fell PKR 1.2 trillion short of covering interest payments and defense spending, forcing the government to rely on additional borrowing for other expenses.
The IMF’s $7 billion bailout package includes approximately 50 conditions, some monitored quarterly or annually, tied to loan tranche disbursements. While the provincial governments’ failure to meet the cash surplus target was a significant miss, as these are outside federal control, the government remains optimistic about the upcoming review talks next month for the next $1 billion tranche, citing progress on other key benchmarks.
The bailout, agreed upon last year, has played a crucial role in stabilizing Pakistan’s economy.
