The International Monetary Fund (IMF) has stated that negotiations with Pakistan regarding crucial funding programs have achieved “considerable progress,” with talks set to continue in the coming days. The announcement signals a positive step forward for the country’s economic stabilization efforts.
Reviews Focus on Fiscal and Climate Reforms
Discussions centered on the third review under Pakistan’s $3 billion Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF). The talks, led by IMF advisor Iva Petrova, were held in Karachi, Islamabad, and virtually from February 25 to March 11, 2026.
According to the IMF’s statement, Pakistan’s program implementation under the EFF “remained broadly aligned with the authorities’ commitments through end-February 2026.”
Key Policy Areas Under Discussion
The global lender highlighted several critical areas where progress was made:
- Sustaining fiscal consolidation to strengthen public finances.
- Maintaining a tight monetary policy to control inflation within the central bank’s target.
- Advancing reforms to improve the viability of the energy sector.
- Deepening structural reforms to accelerate economic growth.
Petrova noted that particular attention was paid to structural reforms, alongside efforts to strengthen social protection and rebuild spending on health and education.
Climate Resilience and External Risks
The IMF also reported that Pakistan has made “good progress” in implementing reforms to strengthen climate resilience under the RSF arrangement, completing several reform measures.
Discussions additionally covered the economic impact of the ongoing conflict in the Middle East. The talks assessed risks to Pakistan’s economic outlook, balance of payments, and external financing needs amid volatile energy prices and tighter global financial conditions.
Path Forward
The IMF stated that discussions with Pakistani authorities will continue in the coming days to more fully assess the impact of recent global developments and work towards concluding the review. The outcome is pivotal for Pakistan to secure the next tranche of IMF funding, essential for its economic stability.
