IMF and Pakistan Make ‘Significant Progress’ Toward Staff-Level Agreement

The International Monetary Fund (IMF) and Pakistani authorities have made significant progress in reaching a Staff-Level Agreement (SLA) on the first review of the Extended Fund Facility (EFF), according to IMF Mission Chief Nathan Porter.

The IMF team, led by Porter, visited Islamabad and Karachi from February 24 to March 14, 2025, to discuss the progress of Pakistan’s economic program under the $7 billion EFF and a possible new arrangement under the Resilience and Sustainability Facility (RSF).

Key Highlights from the IMF Statement

1. Economic Performance & Reforms

• Program implementation has been strong, with major progress in:
  • Fiscal consolidation to reduce public debt.
  • Tight monetary policy to control inflation.
  • Energy sector reforms to improve financial viability.
  • Structural reforms to accelerate economic growth.
  • Social protection, with increased spending on health & education.

2. Climate Reform Agenda

• Discussions also covered Pakistan’s climate reform agenda, which:
  • Aims to reduce natural disaster risks.
  • Could be supported by the IMF’s Resilience and Sustainability Facility (RSF).

3. Next Steps in the IMF Review

• Discussions will continue virtually to finalize details.
• Once complete, IMF staff will finalize recommendations for the Executive Board’s review.
• Board approval is required for the release of the next $1 billion tranche.

What This Means for Pakistan’s Economy

The progress in IMF negotiations comes as Pakistan faces fiscal challenges, including a revenue shortfall of Rs601 billion and a depreciating rupee. The successful completion of the IMF review is critical for securing further financial assistance and maintaining economic stability.

As Pakistan moves toward finalizing the IMF deal, investors and policymakers will closely watch further economic developments.

Stay tuned for more updates on Pakistan’s economic outlook and IMF negotiations!