Pakistan and the International Monetary Fund are expected to reach a staff-level agreement within days for the release of the next $1.2 billion loan tranche under the ongoing programme.

Sources say the IMF mission has shared a draft of the Memorandum of Economic and Financial Policies with the government. After final consultations and consensus, the document will be signed by the finance minister and the governor of the State Bank of Pakistan.

The IMF has reportedly urged Pakistan to increase both tax and non-tax revenues. Among key proposals under discussion is a Rs5 per litre increase in levy on petrol and diesel, following a similar hike on high-octane fuel.

In addition, the government has taken the IMF into confidence over a planned Rs100 billion cut in the development budget, aimed at managing fiscal pressures.

However, the IMF has raised concerns over giving the government authority to appoint heads of key institutions. It emphasized that such appointments should remain with respective boards, not the federal government.

Also Read: Govt plans cheap petrol for bikes and rickshaws

Discussions also covered plans to control circular debt in the power and gas sectors, while the IMF continues to assess the impact of regional tensions on Pakistan’s economy. Rising oil and fertilizer prices and broader financial challenges are also under review.

Meanwhile, proposals to provide relief to the real estate sector are being considered. These include potential tax reductions on property transactions, subject to IMF approval, and incentives for overseas Pakistanis to boost investment.