PM Shehbaz to meet IMF chief in Dubai ahead of crucial loan talks

ISLAMABAD: Prime Minister Shehbaz Sharif is scheduled to meet with International Monetary Fund (IMF) Managing Director Kristalina Georgieva today (Tuesday) in Dubai, just three weeks before the anticipated March 3 commencement of review discussions for the $1 billion second tranche of a $7 billion loan deal, reported The Express Tribune.

According to government and diplomatic sources, this meeting was requested by Pakistan and will take place during the World Governments’ Summit in Dubai, where numerous global leaders and policymakers have gathered to discuss governance, innovation, and international cooperation.

This marks the third encounter between PM Sharif and Georgieva in the last ten months. The Prime Minister left for a two-day official trip to the UAE on Monday, accompanied by a high-level delegation, including Deputy Prime Minister Ishaq Dar and other key cabinet members.

Finance Minister Muhammad Aurangzeb is expected to join the meeting upon his return from Lisbon, Portugal.

The exact purpose of the meeting remains unclear, occurring just weeks before the scheduled first program review under the $7 billion agreement. Neither the IMF nor the Ministry of Finance has commented on the forthcoming discussions between the two leaders.

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Previously, in September, PM Sharif met with Georgieva during the United Nations General Assembly, where the IMF MD expressed the Fund’s support for Pakistan’s economic strategies and highlighted the importance of macroeconomic stability and sustainable growth.

The meeting occurs at a time when the Shehbaz Sharif administration faces pressure from the real estate sector to reduce transaction taxes and from the business community to foster economic growth.

The Prime Minister has postponed a meeting where he was to decide on possible reductions of income tax rates for the real estate sector and the abolition of federal excise duties. Instead, he formed a cabinet-led task force to assess tax relaxation options for the real estate market. Meanwhile, the salaried class in Pakistan is struggling with inflation, increasing living costs, and high taxes, yet PM Sharif has not established a task force to address their grievances.

The first review talks between Pakistan and the IMF are set to begin from March 3 to March 14 in Islamabad. Recently, Finance Minister Muhammad Aurangzeb confirmed these negotiations would kick off in early March, expressing optimism for successful discussions, particularly following the introduction of Agriculture Income Tax legislation in Sindh and the resolution of gas pricing for in-house power plants.

Both federal and provincial governments have met conditions related to maintaining a primary budget surplus, cash surplus, and increasing provincial taxes. However, there are ongoing concerns about the performance of the Federal Board of Revenue (FBR) in the upcoming review talks.

In addition, there are unresolved issues pertaining to amendments to the Pakistan Sovereign Wealth Fund Act; nonetheless, Pakistani officials remain optimistic about the review talks’ success.