The International Monetary Fund (IMF) will examine the external financing needs of Pakistan in its performance review discussions next week. The global body will hold an unscheduled discussion in the country and assess the need of new foreign loans to fill almost $2.5 billion in external financing gap needed for the fiscal year.


The Express Tribune cited government sources and reported that certain loans have not been secured yet. The IMF Mission Chief, Nathan Porter, will lead the talks which will begin on Tuesday, reported PTI.


The first formal review for the release of the second $1.1 billion tranche is set to be held in March 2025. Pakistan is currently facing delays in securing loans from bilateral creditors, which has made it difficult for the country to bridge its external financing gap.


Earlier, the lender estimated an overall external financing gap of $5 billion for the 2024-27 period, out of which $2.5 billion is estimated for this fiscal year.


Pakistani authorities claimed that this gap would be smaller than expected five months earlier, owing to the better performance of the external sector.


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The report noted that exports and foreign remittances have been performing well, cutting down pressure on the external account. However, loans are still required to repay existing debts, specifically the amount owed to Western financial institutions.


The IMF approved the $7 billion package for Pakistan in September, and the country expected to raise $3.2 billion against the $2.5 billion in debt needs. Further, Pakistan has also urged China to reschedule $3.4 billion in debt extended by China’s Export-Import (Exim) Bank. Out of this, nearly $750 million is due in the current fiscal year.


This visit from the IMF comes nearly six weeks after the loan got approved and four months post the planned review, to understand performance on the July-September targets.