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IMF REACHES STAFF-LEVEL AGREEMENT WITH PAKISTAN ON FIRST EFF REVIEW Thursday, 27 March, 2025 | 26 Ramazan, 1446
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Rs 20.00 | Vol XV No 261 | 8 Pages | Lahore Edition
DEAL INCLUDES A NEW 28-MONTH RSF ARRANGEMENT GRANTING PAKISTAN ACCESS TO $1.3B AND, AN ADDITIONAL $1.0B UNDER EFF ISLAMABAD
Staff RepoRt
HE International Monetary Fund (IMF) announced on Wednesday that it has reached a staff-level agreement with Pakistan on the first review of its economic program under the Extended Fund Facility (EFF) and a new arrangement under the Resilience and Sustainability Facility (RSF). The discussions took place from February 24 to March 14, 2025, in Karachi and Islamabad, and continued virtually thereafter. The agreement includes a new 28month arrangement under the RSF, providing Pakistan with total access of approximately $1.3 billion (SDR 1 billion). Subject to IMF Executive Board approval, Pakistan will gain access to about $1.0 billion (SDR 760 million) under the EFF, bringing total disbursements under the program to around $2.0 billion. In a statement, the IMF noted Pakistan’s significant progress over the past 18 months in restoring macroeconomic stability, despite global challenges. It highlighted improvements in inflation, financial conditions, and external balances. However, the IMF also warned of elevated risks, including potential policy slippages, global financial tightening, and climate-related challenges. According to the statement, the Pakistani authorities have committed to further strengthening public finances, ensuring price
stability, and enhancing fiscal and monetary policies to support private sector-led growth. Key reforms under the RSF-supported program include continued fiscal consolidation, revenue mobilization, structural energy reforms, and climate resilience initiatives. The authorities reiterated their commitment to the EFF-supported program and plan to supplement their efforts by advancing reforms under the RSF-supported program aiming to address long-standing economic vulnerabilities to climate shocks and build resilience. The authorities’ policy priorities include: Continued fiscal consolidation to reduce public debt while creating space for social and development spending and reducing crowding out of private investment. The authorities are on track to achieve an FY25 underlying primary surplus of at least 1.0 percent of GDP and are committed to sustaining consolidation in the FY26 budget. While refraining from increasing current spending beyond that budgeted, the authorities are committed to preserve the generosity of the Benazir Income Support Programme (BISP) unconditional cash transfer program and aim to create savings on energy subsidies and prioritize development spending. Making further progress on fiscal structural reforms. The authorities are determined to continue efforts to enhance revenue mobilization, spending efficiency, and transparency, broadening the tax base. Notably, all four provinces have amended their Agriculture Income Tax (AIT) regimes—an im-
portant step towards greater tax equity and expanding the tax base—although effective implementation is crucial to the AIT’s success and greater fiscal devolution in FY26. The authorities also remain committed to improving public financial management, ensuring spending transparency through the electronic Pakistan Acquisition and Disposal System (e-PADS), and developing debt management to strengthen sustainability and governance.
PM hails conclusion of agreement with IMF CONTINUED ON PAGE 02
ISLAMABAD
Staff RepoRt
Prime Minister Shehbaz Sharif on Wednesday hailed the successful conclusion of a staff-level agreement with the International Monetary Fund (IMF) for a new $1.3 billion arrangement, commending the government economic team for their tireless efforts in securing the deal. Chairing the Cabinet Committee meeting here, the prime minister commended the collective efforts of the Deputy Prime Minister, Finance Minister, Planning Minister, Commerce Minister, Economic Affairs Minister, FBR Chairman and other key members of the economic team for
their diligent work in securing the IMF agreement. He reflected on the skepticism from opponents, who had predicted that a mini-budget would be necessary to secure the deal. However, the prime minister asserted that the agreement was achieved without the need for additional taxation measures, proving the government’s resolve and planning. The prime minister also acknowledged the hardships faced by the common people who bore the burden of price hike during the process of achieving economic stability. Besides, he paid tribute to the salaried persons who contributed a major portion in tax collection. The government will receive $1.3 billion from the IMF, which will
bolster Pakistan’s foreign reserves to $8.3 billion, the prime minister said terming it a big achievement to stabilize the county’s economy. He also highlighted the contributions of all the provincial governments and their relevant chief ministers in supporting the federal government in securing the IMF agreement. Highlighting the government’s success in surpassing tax collection targets, he said the IMF had aimed for a 10.2% tax-toGDP ratio, but with strong performance from the economic team, the tax-to-GDP ratio had reached 10.6%, marking the highest achievement in the last four years.
CONTINUED ON PAGE 02
US lawmakers introduce bill targeting Pakistani officials ‘PTI Pleas’: IHC serves notices WASHINGTON
MonitoRing RepoRt
Two US lawmakers have introduced a bipartisan bill in the House of Representatives seeking sanctions against Pakistani state officials over alleged human rights violations, including the “persecution” of former prime minister Imran Khan. According to US media, the proposed bill, titled the Pakistan Democracy Act, was introduced by Republican Congressman Joe Wilson of South Carolina and Democratic Congressman Jimmy Panetta of California. It has been referred to the House Foreign Affairs and Judiciary Committees for review.
The proposed legislation calls for sanctions to be imposed on Pakistan’s army chief within 180 days if the country fails to take steps to improve its human rights situation. The bill aims to invoke the US Global Magnitsky Human Rights Accountability Act, which permits the US to deny visas and entry to individuals accused of committing human rights violations. It also directs the US government to identify and sanction individuals allegedly involved in the suppression of political opposition in Pakistan. The president would be granted authority to lift the sanctions if Pakistan ends military interference in civilian governance and releases all “wrongfully detained political detainees.”
The tabling of the draft bill reflects the persistent efforts of PTI supporters in the US, who have remained active in lobbying American lawmakers since Imran Khan was ousted from power in 2022. Over the last three years, activists have continued to stage rallies, engage with members of Congress, and advocate for greater US involvement in Pakistan’s political developments. Back in June 2024, the US House of Representatives adopted a similar resolution with strong bipartisan support — 98 per cent voting in its favour. That resolution called on then-president Joe Biden to encourage Pakistan to safeguard democratic values and the rule of law. Despite this, the Biden administration refrains from taking any action.
scrapped net billing. The decision, applicable to new net-metering consumers, was taken at an ECC meeting, presided over by Finance Minister Muhammad Aurangzeb. Under the revised policy, power companies would purchase surplus solar electricity from consumers at Rs10 per unit during the day while selling grid electricity at Rs42 per unit (off-peak) and Rs48 per unit (peak) after sunset — excluding taxes and duties. Additionally, consumers would no longer be allowed to install solar capacity exceeding their sanctioned load, except for a 10 per cent cushion, compared to the 50pc margin permitted under the previous policy. Existing consumers would gradually come under this new framework as their seven-year contracts ex-
pired. The announcement was met with widespread criticism with even Petroleum Minister Ali Pervez Malik criticising the move, saying it would send a bad signal to the market and consumers and could have been handled better. The business community had called on the government to engage with relevant stakeholders, including traders and industry representatives, to devise a balanced and comprehensive energy policy. Such a policy, they emphasised, should encourage the growth of renewable energy while safeguarding the interests of all power consumers. Among those joining the chorus of backlash was former finance minister and economist Miftah Ismail who last week slammed the government for the move and for allowing electricity prices to reach an exorbitant level.
Govt decides to consult all stakeholders on net metering policy after backlash ISLAMABAD
Staff RepoRt
The government decided on Wednesday to broaden the scope of consultation on the Solar Net Metering Regulations approved by the Economic Coordination Committee (ECC) and re-submit the recommendations to the federal cabinet after taking further feedback from all stakeholders following widespread backlash. The decision was taken in a meeting of the federal cabinet today. In a knee-jerk reaction to curb renewable energy growth through solar net metering amid high grid electricity costs, the government on March 13 had reduced the buyback rate by two-thirds to Rs10 per unit and
to PM, president over delay in CEC’s appointment ISLAMABAD
Staff RepoRt
The Islamabad High Court (IHC) on Wednesday issued pre-admission notices to the federal government, prime minister, and president over the delay in appointing the chief election commissioner (CEC) and two Election Commission of Pakistan (ECP) members. A single-member IHC bench, comprising Justice Muhammad Azam Khan issued the notices while hearing a petition filed by Omar Ayub and Shibli Faraz – PTI’s Opposition Leaders in the National Assembly and the Senate. The petitioners submitted in the court that the CEC and members of the Election Commission of Pakistan (ECP) from Sindh and Balochistan are now illegally holding their positions following completion of their tenures on January 26. The petition further claims that Prime Minister Shehbaz Sharif, National Assembly Speaker Sardar Ayaz Sadiq and Senate Chairman Syed Yousaf Raza Gilani have failed to fulfill their constitutional obligations in ensuring timely appointments. The petition urges the court to declare their continuation in office unconstitutional and to direct the prime minister to consult with the opposition leader on new appointments. The petitioners have requested the court to instruct the National Assembly Speaker to form a parliamentary committee for the selection process and to direct the Senate Chairman to send the list of Senate members to the Speaker for further proceedings. During proceedings on Wednesday, the court also directed notices to the CEC and ECP members. Petitioners’ lawyer Sameer Khosa argued that the CEC and ECP members continue to serve despite the expiration of their terms, which he claimed violates constitutional provisions.