The International Monetary Fund (IMF) may delay its new $7 billion bailout package for Pakistan if the country fails to secure a $2 billion financing gap from commercial lenders by the end of this week. This development comes as Pakistan prepares to submit a signed Letter of Intent (LoI) to the IMF Executive Board for the approval of a 37-month Extended Fund Facility (EFF).

As of September 18, 2024, Pakistan is not listed on the Board’s agenda, and the country has yet to secure financing commitments from key lending partners. If these commitments are not confirmed this week, the approval for the loan could be jeopardized.

A delay extending into October might prompt the IMF to recommend a mini-budget if fiscal slippages occur, particularly due to potential shortfalls in tax and non-tax revenue collections. The Federal Board of Revenue (FBR) anticipates a revenue shortfall of Rs. 200-220 billion for the July-September quarter, with final estimates expected between September 18 and 20.

In response to the economic strain, the Ministry of Finance is hopeful that the upcoming Monetary Policy Committee (MPC) meeting on September 12, 2024, will result in a policy rate cut of 150-200 basis points, which could help ease expenditure pressures.