Pakistan and the International Monetary Fund (IMF) are scheduled to hold important review discussions in September to evaluate the country’s advancement under its financial assistance programmes. These talks will cover the fourth review of Pakistan’s Extended Fund Facility (EFF) valued at over USD 7 billion and the third review of the USD 1.4 billion Resilience and Sustainability Facility (RSF), which targets climate-related reforms.
Both reviews are expected to be conducted concurrently. The IMF mission will assess Pakistan’s economic performance during the second half of the fiscal year, spanning January to June. The results of these negotiations will be critical in deciding the release of upcoming loan instalments and gauging the overall progress of the two IMF programmes.
In a significant development earlier this year, an IMF team completed a week-long visit to Pakistan in May, engaging with government officials on the country’s economic status, reform agenda, and the fiscal year 2026-27 budget. These discussions focused on the $7 billion EFF and the $1.4 billion RSF.
Led by Iva Petrova, the mission described the talks as constructive, covering recent economic trends, the effects of the Middle East conflict, fiscal policies, and structural reforms. Pakistan reiterated its commitment to achieving a primary budget surplus of 2% of GDP in FY2026-27 through initiatives aimed at expanding the tax base, enhancing tax administration, and improving public financial management.
Notably, the IMF highlighted that the State Bank of Pakistan would maintain a suitably tight monetary policy to control inflation, while exchange rate flexibility would remain a key mechanism to absorb external shocks. The discussions also addressed reforms in the energy sector, state-owned enterprises, financial markets, and climate resilience measures, including power subsidy reforms and disaster risk financing.
Earlier in May, the IMF approved Pakistan’s latest programme review, enabling the release of approximately $1.1 billion under the EFF and $220 million under the RSF. This brought total disbursements under both programmes to around $4.8 billion. The IMF indicated that the next mission, which includes the Article IV consultation and reviews under the EFF and RSF, is anticipated in the latter half of 2026.
