Agreement to release the second tranche of funds under the International Monetary Fund’s (IMF) $3 billion stand-by arrangement (SBA) with Pakistan is expected this week, IMF Managing Director Kristalina Georgieva said on Wednesday.
“I expect an agreement on the review to come within this week,” Georgieva said during an interview with Bloomberg TelevisionHaslinda Amin in Singapore.
He urged the federal government to ensure effective tax collection.
The confirmation comes amid IMF concerns about the upcoming general election and the role, mandate and powers of the Special Investment Facilitation Council (SIFC). The Fund has also sought further increases in electricity prices.
The tentative date for the IMF board meeting for the next review is March 1, indicating that the third review for the $1.2 billion tranche will take place around February next year.
Reading The critical $3 billion IMF bailout comes with tough conditions
The current IMF bailout of $3 billion was given for a period of nine months, ending in April next year, on the assumption that the new government would enter another program after the election.
If the second quarterly assessment is successful, it will allow the second tranche of funds worth $710 million to be released.
The first evaluation of the short-term loan agreement was initiated on November 2 by IMF technical staff and completed on November 10.
“The Pakistani authorities, especially the finance minister, deserve credit for sticking to the schedule they have in a very difficult time,” Georgieva said during the interview with Bloomberg Television on Wednesday.
Responding to a question on concerns affecting the release of the tranche, he referred to “tax collection” as the prevailing issue in the country.
“The country currently collects 12 percent tax to GDP. We’re saying it should be at least 15% to help the revenue keep your economy running,” the top IMF official said.
“For people in Pakistan who can pay taxes, collect them from them,” he advised.
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