IMF, Pakistan make ‘significant progress’ toward staff-level agreement

Pakistan and the International Monetary Fund (IMF) made significant progress toward a staff-level agreement (SLA) following review talks under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF), the Washington-based lender said after concluding its mission to the country.

This comes after Business Recorder reported that talks between the IMF mission and the Pakistani authorities remained inconclusive.

An IMF team, led by Iva Petrova, visited Karachi and Islamabad from September 24 to October 8, 2025, to hold discussions on the second review under the EFF and the first review under the RSF.

At the conclusion of the discussions, Petrova issued the following statement:

“The IMF mission and the Pakistani authorities made significant progress toward reaching an SLA on the second review under the 37-month Extended Arrangement under the EFF and on the first review of the 28-month arrangement under the RSF.

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

“Significant progress was made in the discussions in several areas, including sustaining fiscal consolidation to strengthen the public finances while providing needed flood recovery support; ensuring inflation remains durably within the SBP’s target range by maintaining an appropriately tight and data-dependent monetary policy; restoring the viability of the energy sector by implementing regular tariff adjustments and cost-reducing reforms; and advancing structural reforms to reduce the footprint of the state, strengthen governance and transparency, foster a more competitive business environment, and liberalize commodity markets.

“Productive discussions were also held on the authorities’ reform agenda to strengthen climate resilience, including the completion of reform measures under the RSF.

“The IMF team and the authorities will continue policy discussions with a view to settling any outstanding issues.

“The IMF team wants to express its sympathy to those affected by the recent floods, and is grateful to the Pakistani authorities, private sector, and development partners for many fruitful discussions and their hospitality throughout this mission,” read the statement.

Meanwhile, the IMF said that the views expressed in the statement are those of the IMF staff and do “not necessarily represent the views of the IMF’s Executive Board”.

“This mission will not result in a Board discussion,” it added.

Sources said that the IMF had shared the draft Memorandum of Economic and Financial Policies (MEFP) with the Ministry of Finance.

Finance Minister Muhammad Aurangzeb reportedly said that once the MEFP is signed, a staff-level agreement will be reached between Pakistan and the IMF. He added that Pakistan has met all targets set by the IMF as part of the ongoing program.

Aurangzeb noted that consensus has been reached on major targets with the IMF.