Post by : Rameen Ariff

Islamabad: Pakistan has entered critical discussions with the International Monetary Fund (IMF) as an IMF team arrived in the country to assess the progress of the USD 7 billion Extended Financing Facility (EFF) and the USD 1.1 billion Resilience and Sustainability Facility (RSF). These programs are part of Pakistan’s ongoing efforts to stabilize its economy, improve fiscal performance, and attract foreign investment.

The IMF mission, led by Pakistan’s IMF Mission Chief Iva Petrova, started with a formal kick-off meeting with Pakistan’s economic delegation, headed by Finance Minister Muhammad Aurangzeb. Key officials including the State Bank of Pakistan governor, finance secretary, and the Federal Board of Revenue (FBR) chairman were also present. The discussions focused on reviewing past performance, identifying gaps, and planning corrective measures to meet upcoming targets.

According to reports, Pakistan’s performance as of the end of June 2025 has been mixed. While power sector targets under the program were successfully met, revenue collection fell short by approximately Rs 1.2 trillion, almost 1 percent of the country’s GDP. The first two months of the current fiscal year have shown similar shortfalls in revenue collection, raising concerns about meeting the next biannual targets scheduled for December 2025.

The IMF team will remain in Pakistan for nearly two weeks. During this period, it will conduct an in-depth review of the USD 7 billion EFF and USD 1.1 billion RSF programs, evaluating key indicators such as fiscal reforms, revenue performance, and structural adjustments. Both sides are expected to discuss and agree on corrective actions to ensure that Pakistan meets its targets for the next review period.

A significant part of the talks will also focus on the long-delayed implementation of Pakistan’s brownfield petroleum refinery policy. This policy has been stalled for years and is seen as crucial for attracting around USD 6 billion in fresh investment for refinery upgrades. Authorities argue that these upgrades are aligned with the RSF’s objectives, as they aim to produce petroleum products meeting European environmental standards while minimizing carbon and sulphur emissions.

The IMF mission will also hold forward-looking discussions with Pakistani authorities to accelerate the implementation of reforms and achieve the end-December 2025 targets. Officials are expected to focus on improving revenue collection, facilitating investment, and ensuring that the country remains on track for sustainable economic growth.

The review highlights Pakistan’s ongoing collaboration with the IMF and underscores the country’s commitment to economic stabilization, improved fiscal governance, and sustainable development. Successful implementation of these programs is seen as vital for boosting investor confidence, strengthening public finances, and supporting Pakistan’s long-term economic objectives.

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