Key points:
- Pakistan likely to meet most IMF performance benchmarks
- IMF mission expected in second week of September
- Revenue shortfall remains key risk to fiscal targets
ISLAMABAD: Pakistan is on track to meet nearly all seven quantitative performance criteria under its International Monetary Fund (IMF) programme, reducing the risk of major hurdles in the Fund’s upcoming September review, Arif Habib Limited (AHL) said.
“Based on publicly available data, we believe Pakistan is on track to meet nearly all seven QPCs, with one data point yet to be disclosed,” the brokerage said in its latest Pakistan’s Economic Outlook report.
Quantitative performance criteria are the programme’s key numerical benchmarks. AHL said that meeting them would support a smooth review with limited risk of waivers or major complications.
An IMF staff mission is expected to visit Pakistan in September for the fourth review of the $7 billion Extended Fund Facility (EFF) and the third review of the $1.4 billion Resilience and Sustainability Facility (RSF), according to a Finance Ministry official.
The official said the mission would probably arrive in the second week of September, but stressed that the schedule had not been finalised.
The IMF’s programme documents set September 15, 2026 as the scheduled availability date for the fourth EFF review, which is based on Pakistan’s end-June 2026 performance.
That date is a programme milestone and should not be treated as the mission’s confirmed arrival date. The mission can arrive even earlier, the official added.
The forthcoming assessment follows the IMF Executive Board’s completion in May of the third EFF review and second RSF review.
The decision enabled release of about $1.1 billion under the EFF and about $220 million under the RSF, taking cumulative disbursements under the two arrangements to roughly $4.8 billion.
AHL said the significance of the coming review lies less in securing new commitments than in demonstrating consistency in policy implementation.
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“It is also the first full review since the Moody’s and S&P upgrades and Pakistan’s debut Panda Bond,” the brokerage said.
“A clean review would strengthen the argument that improved credit ratings and access to international capital markets reflect genuine reform progress rather than market optimism running ahead of economic fundamentals, the report added.
Pakistan’s revenue shortfall a major risk
The brokerage nevertheless identified fiscal performance as a major risk. The Federal Board of Revenue (FBR) missed its FY2026 tax collection target by Rs 1.1 trillion against the original target of Rs 14.1 trillion.
AHL warned that another major revenue shortfall could put pressure on Pakistan’s FY2027 fiscal framework.
It forecasts the fiscal deficit to widen to 3.9 per cent of gross domestic product (GDP) in FY2027 from 2.6 per cent in FY2026, although it expects the primary surplus to remain positive at 2 per cent of GDP.
The IMF mission is expected to examine Pakistan’s economic performance during January-June 2026 and discuss the release of the next tranche under the EFF as well as financing under the RSF.
Discussions are also expected to cover tax collection, energy-sector reforms, privatisation, governance and anti-corruption measures.
Among the programme benchmarks, AHL said six of the seven quantitative criteria appeared likely to have been met based on available information.
The brokerage said data for the remaining criterion — the cumulative floor for new tax filers — had not been disclosed.
AHL also noted that data for the State Bank of Pakistan’s net international reserves target had not yet been released.
Other indicators showed the central bank’s net domestic assets below the programme ceiling and cash transfers above the required floor, according to the brokerage.
The fiscal position remains particularly important because the government has committed to maintaining a primary surplus of 2 per cent of GDP in FY2027.
