IMF ends Pakistan visit without deal, but praises ‘significant progress’ on reforms

The International Monetary Fund (IMF) on Wednesday concluded its two-week visit to Pakistan without finalizing a staff-level agreement on the country’s ongoing loan program, but praised the government’s progress on key economic reforms.

An IMF team led by Iva Petrova visited Karachi and Islamabad from September 24 to October 8 to conduct the second review under Pakistan’s 37-month Extended Fund Facility (EFF) and the first review under the 28-month Resilience and Sustainability Facility (RSF).

In a statement issued at the end of the mission, Petrova said that while an agreement had not yet been reached, “significant progress” had been made, and both sides agreed to continue policy talks to resolve outstanding issues.

“Program implementation remains strong and broadly aligned with the authorities’ commitments,” Petrova noted.

The IMF team commended Pakistan for maintaining fiscal discipline, supporting flood recovery efforts, and implementing a tight, data-driven monetary policy aimed at keeping inflation within the central bank’s target range.

The statement highlighted Pakistan’s efforts to revive its troubled energy sector, including regular tariff adjustments and cost-cutting reforms, as well as initiatives to strengthen governance, increase transparency, and reduce the role of state-owned enterprises in the economy.

Discussions also addressed improving the business climate, liberalizing commodity markets, and implementing climate-related reforms under the RSF. The IMF expressed satisfaction with Pakistan’s progress on climate resilience and reform efforts in the face of recent environmental challenges.

The IMF urged continued focus on disciplined public spending and recommended maintaining a tight monetary policy to control inflation. It also emphasized the importance of supporting communities affected by devastating floods.

Petrova expressed sympathy for flood victims and extended gratitude to Pakistani officials, private sector representatives, and development partners for their cooperation during the mission.

Pakistan is currently engaged in a 37-month, $7 billion EFF program aimed at stabilizing its economy and a parallel 28-month RSF arrangement focused on climate resilience. In all, Pakistan has received $2.1 billion from EFF, with the last disbursement being released in May this year.

The staff-level agreement, once finalized, would be subject to approval by the IMF’s Executive Board before any new disbursement of funds can be made.