The government and the staff mission of the International Monetary Fund (IMF) will today (Monday) kick-off formal talks for the fourth review of the $7 billion Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF).

The IMF mission, led by Iva Petrova, is set to stay in Pakistan for roughly two weeks, until the first week of October, to carry out the two reviews.

Pakistan is on a 37-month IMF program aimed at stabilising the economy through fiscal discipline, structural reforms and steps to foster long-term growth.

With the reviews completed successfully, Pakistan will become eligible to receive around $1 billion under the EFF and another $200 million under the RSF, bringing the total planned financing to $1.2 billion by the end of November or early December.

The discussions will review Pakistan’s economic performance and program targets for the period up to June 30 based on data available up to June 30. The Pakistani authorities will also brief the IMF on the Sovereign Wealth Fund, the measures to eliminate circular debt, and the rationale behind not deregulating the sugar business.

The IMF will also be briefed on the current account deficit, primary surplus, foreign currency reserves and exchange rate. Expansion of tax base and reforms will be the focus of talks with the Federal Board of Revenue (FBR).

IMF to provide Pakistan $3.6 billion more in next 14 months

The Ministry of Energy will update the IMF on circular debt and reforms, while the National Accountability Bureau (NAB) and Federal Investigation Agency (FIA) will give updates on actions to fight money laundering and terrorist funding.

The IMF will also have discussions with the governments of Punjab and Khyber Pakhtunkhwa to strengthen tax and non-tax revenue collection, particularly measures to boost agricultural tax collection.

He claimed the government had neither issued any sovereign guarantee for a taxpayer-funded loan to buy aircraft for PIA nor was it buying aircraft for the privatised airline.

The clarification follows reports on social media that a minister was involved in negotiations for sovereign-backed finance for PIA jets.

The claims came after a meeting between Finance Minister Muhammad Aurangzeb and US Export-Import Bank Chairman John Jovanovich on the sidelines of the 81st session of the United Nations General Assembly in New York.

The conference was held to discuss the Reko Diq mining project and finance options for the purchase of planes for PIA, the Finance Ministry stated. Aurangzeb also talked about PIA’s interest in Boeing 787 Dreamliners and asked support for a finance package for aircraft and engines.

“Typically US Exim financing is used to finance US exports and may be used for asset-backed aircraft financing, meaning that a sovereign guarantee is not automatically required,” Schehzad said.

Talks with US Exim were not confined to PIA and included prospective finance in aviation, refinery projects and Reko Diq as part of larger Pakistan-US economic cooperation, he said.