This is the appropriate time to review progress on implementation of the reforms committed to the IMF in the new IMF Extended Fund Facility of 5,320 million SDRs, equivalent to approximately USD 7 billion.

The IMF review mission is targeted for March 15, 2025, and will focus on the quantitative performance criteria, indicative targets and structural benchmarks of end-December 2024. The objective of this article is to focus on performance in the relation to the targets of end-December 2024.

The first quantitative performance criterion for end-December 2024 is the floor on international reserves of the SBP at USD 12,050 million. The actual foreign exchange reserves of the SBP as of the 27th of December were USD 11,710 million. Therefore, there is only a minor deviation from the target. This has been facilitated by a current account surplus of $944 million, as compared to a deficit of USD 1676 million in the corresponding period of 2023-24.

The second performance criterion of importance is the ceiling on the general government primary budget deficit. The expectation was a surplus of Rs 198 billion in end-September 2024. The actual outcome was much better at Rs 3,202 billion. This was largely due to the transfer to the federal government the surplus profit of the SBP of a very large Rs 2,500 billion. However, even in the absence of this large transfer, the primary surplus would have been Rs 702 billion, much higher than the surplus agreed with the IMF.

The targeted primary surplus in end-December 2024 is expected to be Rs 2,877 billion. This is highly likely given the above mentioned lumpy transfer earlier by the SBP.

There........

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