Pakistan, IMF begin crucial programme review discussions

In a key development, the Ministry of Finance commenced a kick-off meeting with the International Monetary Fund (IMF) Mission on Monday, formally initiating discussions on the third review under the Extended Fund Facility (EFF) programme and the second review under the Resilience and Sustainability Facility (RSF).

“An IMF mission led by Iva Petrova has started discussions with the authorities in Karachi and Islamabad on the third review of Pakistan’s EFF arrangement and the second review of the RSF,” Mahir Binici, Resident Representative in Pakistan, told Business Recorder.

Discussions will continue to be held virtually, he added.

The meeting marked the beginning of detailed engagements between Pakistani authorities and IMF officials, focusing on performance benchmarks, fiscal targets, and broader macroeconomic indicators.

Discussions are scheduled to continue until March 11.

The mission will assess Pakistan’s economic performance for the July–December 2025 period and initiate negotiations for the release of the next tranche under the EFF and the RSF.

According to officials, the fund’s mission will examine tax collection, as well as reforms in the energy sector and progress on the privatisation programme. Governance and anti-corruption measures will also come under discussion, particularly transparency in appointments to key institutions.

After IMF staff and the Pakistani authorities reach a staff level agreement (SLA) on the third review under the EFF and the second review under the RSF, the agreement will be subject to approval of the IMF’s Executive Board.

Upon approval, Pakistan will have access to about USD 1 billion under the EFF and USD 200 million under the RSF. Pakistan has already received USD 3.3 billion under the two arrangements.

Last week, Finance Minister Muhammad Aurangzeb expressed confidence over the government’s fiscal management, stating that Pakistan remains “in a good position, particularly about tax collection”.

Meanwhile, the Pakistan Business Council (PBC), in a meeting with the visiting delegation of the IMF, has acknowledged improvements in inflation control and fiscal consolidation under the ongoing Board programme, but stressed that macroeconomic stabilisation must now deliver tangible economic gains.

The PBC also called for abolishing the super tax, gradually cutting the corporate tax rate to 25%, and rationalising advance and withholding taxes that effectively function as minimum taxes.