ISLAMABAD: A staff-level delegation of the International Monetary Fund (IMF) is scheduled to visit Pakistan next week to review the country’s progress on economic indicators achieved so far after entering a $6 billion loan deal with the fund in July this year, Pakistan’s Ministry of Finance said on Wednesday.

The IMF had given Pakistan a $6 billion, three-year loan as requested by Prime Minister Imran Khan’s government to resuscitate the country’s ailing economy. The IMF said that the program was aimed at supporting “the authorities’ economic reform program” and to help “reduce economic vulnerabilities and generate sustainable and balanced growth.”

The fund will review Pakistan’s performance on a quarterly basis, phasing release of the aid over the next 39 months.

“Next week, the Ministry of Finance will welcome Jihad Azour, Director of the IMF Middle East and Central Asia Department and apprise him on the results achieved so far,” a spokesperson for the ministry told Arab News.

He said progress on nearly all the performance and structural benchmarks achieved during the first quarter of the current financial year was “encouraging.”

 “The ministry is fully committed along with the IMF toward the ongoing reforms program,” he said.

As indicated in program documents, the IMF-supported program will be monitored and reviewed according to a calendar of quarterly reviews. The first one is scheduled to take place at some point in December this year.

Our understanding is that as part of our technical work program, an IMF team will come on a staff visit on September 16-20, the ministry said.

The ministry also said that after initial adjustments, “the economy is rapidly stabilizing, in particular, the external sector, and...the current fiscal year will yield some very positive economic outcomes.”

Economists, however, said it could be that the government’s failure in arresting fiscal deficit, revenue shortfall, and other poor economic indicators pushed the IMF to send a staff-level delegation to Pakistan to review economic results before the scheduled quarterly review of the program in December.

“The strategic direction of the government (with respect to the economy) seems much better this year as compared to the previous financial year,” Dr. Vaqar Ahmed, senior economist and joint executive director of Sustainable Development Policy Institute (SDPI), told Arab News.

But Ahmed said the finance ministry had failed to calculate the exact fiscal deficit as it was much higher than agreed upon with the IMF for the bailout package. 

“Against the government’s target of 7.2 percent of the GDP, the previous fiscal year closed at 8.9 percent of the GDP indicating a slippage of Rs. 686 billion,” he said.

Ahmed said the Federal Board of Revenue recently revealed it would not be able to achieve a revenue target of Rs. 5.5 trillion set for this financial year which may also have concerned the IMF.

“There is a lot of economic uncertainty in the market, and the ministry must move quickly to address it to revive confidence of businessmen and investors to rejuvenate the economy,” he said.

The IMF reforms program has seven performance criteria, five indicative targets and 13 structural benchmarks.