Pakistan meets IMF benchmarks for next $1.2 billion loan tranche: officials

Pakistan has successfully fulfilled the International Monetary Fund's (IMF) benchmarks concerning the energy sector, paving the way for the potential approval of the next loan tranche of USD 1.2 billion, as officials revealed ahead of the upcoming visit by the global lender's review mission to the financially distressed country.

Officials from the Ministry of Energy reported meeting the end-December targets, which included maintaining the circular debt below PKR 385 billion, ensuring timely electricity price increases, and curbing the rise in line losses, reported The Express Tribune.

The IMF will assess the progress in implementing these targets during the loan negotiations under the second review of the USD 3 billion bailout package. The review mission is anticipated to visit Islamabad by the end of this month or early next month, contingent on the completion of government formation at both federal and provincial levels.

Sources noted that while the circular debt slightly exceeded the stipulated amount by reaching PKR 378 billion by end-December, it still demonstrated an improvement over the IMF requirement.

Pakistan has committed to limiting the circular debt to PKR 2.31 trillion, the June 2023 level, by the end of this fiscal year.

Recently, a high-ranking IMF official expressed eagerness to collaborate with the new government in Islamabad. However, the official refrained from commenting on imprisoned former Prime Minister Imran Khan's demand for the IMF to conduct an "audit" of the election results before approving any new loan for the financially strained nation.

Pakistan heavily relies on the IMF and is currently implementing a short-term USD 3 billion agreement. The global lender has already disbursed two tranches of the loan, and the anticipated final tranche of USD 1.2 billion is expected by the end of March or early April.

Experts suggest that the incoming government will need to engage in fresh negotiations with the IMF to secure a new loan.

Initially scheduled for the first week of February, the IMF's review mission postponed its visit on the eve of the general elections.