Negotiations between Pakistan and the International Monetary Fund (IMF) for the next tranche of the$7 billion bailout package are set to commence on March 3. The IMF’s review mission, led by Nathan Porter, is expected to remain in Pakistan until March 14 to evaluate the country’s economic performance for the period from July to December 2024. The release of the next $1 billion tranche will depend on the findings of this review.

The discussions will focus on key areas such as tax reforms, including income tax on the agricultural sector, progress on privatization, fiscal policies, and energy sector reforms. The IMF will also assess Pakistan’s monetary policy, interest rates, inflation, and exchange rate management. The final decision on the tranche’s approval will rest with the IMF Executive Board.

In a parallel development, a technical delegation from the IMF is already in Pakistan conducting a Governance and Corruption Diagnostic Assessment. The delegation is meeting officials from seven key institutions, including the Judicial Commission and the Supreme Court, to discuss judicial appointments and legal matters. Meetings are also scheduled with the Auditor General of Pakistan, the Federal Board of Revenue (FBR), the Securities and Exchange Commission of Pakistan (SECP), and ministries overseeing climate change and housing.

The IMF’s assessment will examine corruption risks in six critical areas: financial and central bank governance, fiscal oversight, market regulation, rule of law, and anti-money laundering. A comprehensive report on governance and corruption vulnerabilities is expected to be released in July. These assessments and negotiations are crucial for Pakistan as it seeks to secure the next tranche of the bailout package and address structural economic challenges.