IMF, Pakistan make progress on third review but talks continue

An International Monetary Fund (IMF) mission has concluded talks in Pakistan on the third review of the country’s economic program under the Extended Fund Facility and the second review under the Resilience and Sustainability Facility, with discussions set to continue in the coming days.

The IMF team, led by Iva Petrova, held meetings in Karachi and Islamabad and virtually from Feb. 25 to March 11, according to a statement issued by Petrova at the end of the visit.

“The IMF mission and the Pakistani authorities held discussions on the third review of the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the second review of the 28-month arrangement under the Resilience and Sustainability Facility (RSF),” Petrova said.

Progress reported in program implementation

Petrova said implementation of the EFF-supported program remained broadly aligned with the government’s commitments through the end of February.

She added that discussions focused on sustaining fiscal consolidation to strengthen public finances, maintaining tight monetary policy to ensure inflation stays within the State Bank of Pakistan’s target range and advancing reforms aimed at improving the financial viability of the energy sector.

The talks also addressed structural reforms designed to accelerate economic growth while strengthening social protection and rebuilding spending on health and education, Petrova said.

Climate reforms and external risks discussed

The IMF said authorities have also made progress in implementing reforms to strengthen climate resilience under the Resilience and Sustainability Facility.

Discussions also covered the potential impact of the conflict in the Middle East on Pakistan’s economic outlook, balance of payments and external financing needs, particularly in the context of rising energy prices and tighter global financial conditions.

“The IMF team and the authorities will continue these discussions with a view to conclude them in the coming days,” Petrova said.