Pakistan's first IMF review to take place in February: finance minister

The International Monetary Fund (IMF) will conduct the first review of the $7 billion Extended Fund Facility approved for Pakistan in mid to late February, Finance Minister Muhammad Aurangzeb has confirmed.

Speaking to Bloomberg TV on the sidelines of the Asian Financial Forum 2025 in Hong Kong, he expressed optimism about the country's economic outlook.

The 37-month EFF, which was approved by the IMF's executive board in September, aims to bolster Pakistan's macroeconomic stability and implement crucial structural reforms.

Aurangzeb said he was optimistic about achieving the program's target of raising the tax-to-GDP ratio to 13.5%. By December, the ratio had already climbed to 10.8%, signaling significant progress.

"We are well on our way to achieving the target, not just to satisfy the IMF but to ensure fiscal sustainability for the country," he added.

The government is focusing on expanding the tax base, incorporating previously untaxed sectors such as agriculture, real estate, and wholesale retail, while also clamping down on tax compliance leakages.

Pakistan aims for a 3.6% economic growth rate in the current fiscal year, despite the World Bank's projection of under 3%.

The minister emphasized the importance of moving away from an import-driven economy, which has historically triggered foreign exchange issues and forced the country into IMF programs.

"We are committed to fundamentally altering the economy's DNA to prioritize export-led growth," the minister stated, outlining plans to reach a 6% growth target over the next two to three years.

As Pakistan pursues financial stability, it sees a return to the global bond market and plans to issue its first Panda bond in Chinese capital markets.

"We are following the Egyptian model to secure credit enhancement and hope to print the inaugural bond within the next six to nine months," Aurangzeb said, adding that a $200 to $250 million equivalent Renminbi bond would be an appropriate starting point.

Pakistan's sovereign credit ratings have seen improvements from major agencies over the past year, bringing optimism about achieving a single "B" category rating. This rating, which is a prerequisite for broader access to international capital markets, signifies a country's creditworthiness and its ability to meet its financial obligations.