Islamabad, March 5, 2025: The International Monetary Fund (IMF) has urged Pakistan to address its revenue shortfall in the upcoming fiscal quarter, warning that there is “no room for shortfall”, according to sources familiar with the negotiations.
During ongoing discussions to unlock a $1 billion loan tranche under the $7 billion loan program, the IMF delegation, led by Nathan Porter, reportedly conveyed its concerns to Pakistani officials.
Sources indicate that the Finance Ministry and the State Bank of Pakistan (SBP) held extensive discussions with the IMF team on several critical economic and financial matters, including Islamic banking reforms, refinance schemes, development finance transition, monetary policy measures external sector review and foreign exchange market trends.
The IMF delegation pushed for the operationalization of the Bank Resolution Framework to strengthen Pakistan’s banking sector and mitigate financial risks. Additionally, the IMF emphasized the need for timely expenditure controls and right-sizing measures to improve fiscal discipline.
On the revenue side, the Federal Board of Revenue (FBR) was directed to enhance compliance risk management, implement reforms for improved tax collection, expand the tax net, focusing on large retailers in major cities and recover high-risk cases in Islamabad, Karachi, and Lahore to help reduce the revenue deficit.
With further negotiations expected, both sides are working towards finalizing Pakistan’s economic roadmap for the coming months. The government is under immense pressure to meet IMF’s revenue targets while ensuring economic stability and fiscal discipline.
