ASIATODAY.ID, WASHINGTON — Pakistan is once again under close scrutiny from the International Monetary Fund (IMF) as the institution concluded preliminary discussions on the third review of the country’s Extended Fund Facility (EFF) program and the second review under the Resilience and Sustainability Facility (RSF) aimed at strengthening economic and climate resilience.
An IMF mission led by Iva Petrova held talks with Pakistani authorities in Karachi, Islamabad, and virtually from February 25 to March 11, 2026. The discussions are part of the assessment of Pakistan’s 37-month Extended Fund Facility arrangement and the 28-month RSF program, both of which are central to the country’s efforts to stabilize its economy.
In her concluding statement, Petrova said the discussions had achieved substantial progress, although negotiations will continue in the coming days to address several outstanding issues.
According to the IMF, implementation of the EFF-supported program through end-February 2026 has remained broadly aligned with the Pakistani authorities’ commitments. Key policy discussions focused on: sustaining fiscal consolidation to strengthen public finances, maintaining sufficiently tight monetary policy to keep inflation firmly within the target range of the State Bank of Pakistan, and advancing energy sector reforms, long seen as one of the country’s structural economic vulnerabilities.
Both sides also discussed deepening structural reforms to accelerate economic growth. These efforts are expected to move forward alongside measures to strengthen social protection programs and rebuild health and education spending, sectors that have faced pressure in recent years.
The IMF also acknowledged notable progress in Pakistan’s climate reform agenda, including the completion of several reform measures under the Resilience and Sustainability Facility, which aims to improve the country’s ability to cope with climate-related shocks.
However, new global challenges are complicating Pakistan’s economic outlook. The talks also examined the impact of escalating tensions in the Middle East on Pakistan’s economy, particularly through volatile and rising energy prices and tighter global financial conditions.
These developments could increase pressure on Pakistan’s balance of payments and its external financing needs.
The IMF said discussions with Pakistani authorities will continue in the coming days, with the goal of reaching a final agreement on the next phase of the reform program and continued financial support.
The outcome of this review is expected to play a critical role in determining Pakistan’s economic stability amid mounting global uncertainties, from geopolitical tensions and energy market volatility to broader risks facing the global economy. (AT Network)
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