First review: IMF sounds optimistic on SLA prospects

ISLAMABAD: The International Monetary Fund (IMF) and the Pakistani authorities made significant progress toward reaching a Staff Level Agreement (SLA) on the first review under the 37-month Extended Arrangement under the Extended Fund Facility (EFF). The talks concluded without reaching a SLA as the IMF mission and the Pakistani authorities will continue policy discussions virtually over the coming days aiming to finalise discussions.

An IMF team, led by Nathan Porter, visited Islamabad and Karachi from February 24 to March 14, 2025, to hold discussions on the first review of Pakistan’s economic program supported by the EFF and on a possible new arrangement under the IMF’s Resilience and Sustainability Facility (RSF). At the conclusion of the discussions, Porter issued the following statement:

The IMF and the Pakistani authorities made significant progress toward reaching a Staff Level Agreement (SLA) on the first review under the 37-month extended arrangement under the EFF.

IMF, Pakistan make ‘significant progress’ toward reaching Staff Level Agreement

“Program implementation has been strong, and the discussions have made considerable progress in several areas including the planned fiscal consolidation to durably reduce public debt, maintenance of sufficiently tight monetary policy to maintain low inflation, acceleration of cost-reducing reforms to improve energy sector viability, and implementation of Pakistan’s structural reform agenda to accelerate growth, while strengthening social protection and rebuilding health and education spending.

“Progress has also been made in discussions on the authorities’ climate reform agenda, which aims to reduce vulnerabilities from natural disasters-related risks, and accompanying reforms which could be supported under a possible arrangement under the Resilience and Sustainability Facility (RSF).

“The mission and the authorities will continue policy discussions virtually to finalize these discussions over the coming days”.

NNI adds: Federal Finance Minister Muhammad Aurangzeb on Saturday expressed satisfaction over Pakistan’s negotiations with the International Monetary Fund (IMF), saying that “fruitful consultations” will continue next week.

Talking to a private television channel, the finance minister stated that the implementation of the IMF program has remained strong and the government has made significant progress in its discussions with the global lender.

“We have presented Pakistan’s economic performance to the IMF mission, and the talks have been positive,” he said.

According to sources, the finance ministry briefed the IMF delegation on key economic indicators, revenue collection, and fiscal reforms undertaken as part of the loan program.

The government also assured the IMF of its commitment to structural reforms, including broadening the tax base and reducing fiscal deficits.

While a staff-level agreement has not yet been reached, officials remain hopeful that continued discussions will pave the way for securing the next tranche of financial assistance.

The IMF has reportedly emphasised the need for stricter tax compliance and further measures in the energy sector to tackle circular debt.—NNI

Copyright Business Recorder, 2025