The International Monetary Fund (IMF) is expected to send its review mission to Pakistan in February for negotiations on the third review of the ongoing loan programme, a development that could unlock the next $1 billion tranche upon successful completion. The visit is a key milestone in Pakistan’s engagement with the Fund as the government seeks to maintain financial stability while pursuing limited relief measures for key segments of the economy.
According to official sources, Pakistan’s economic team has intensified preparations ahead of the review and has already shared critical economic and fiscal data with the IMF. These preparations are being carried out under the direct oversight of the prime minister, who has instructed the Ministry of Finance to reassess and refine the government’s negotiation priorities in advance of the discussions.
The upcoming review is expected to focus on Pakistan’s performance against programme targets, including fiscal discipline, revenue generation, and structural reforms. At the same time, the government plans to raise the issue of targeted public relief, particularly for the salaried class and the industrial sector, which have faced sustained pressure amid inflation, higher taxation, and elevated input costs over recent years.
Officials said a strategy is currently being finalised to seek limited and targeted relief measures while remaining fully aligned with the IMF programme framework. The government aims to ensure that any proposed relief does not undermine agreed fiscal targets or macroeconomic stability, a key condition for the successful completion of the review.
Authorities confirmed that these concerns have already been discussed at the highest level, with a delegation led by the prime minister engaging with the IMF managing director. During these discussions, Pakistan highlighted the need to balance economic stabilization with measures that support growth and ease pressure on households and productive sectors of the economy.
In preparation for the formal review talks, relevant ministries and institutions have been directed to submit concrete and data-backed proposals within the next two weeks. These proposals are expected to form the basis of Pakistan’s case during negotiations, particularly in justifying any requests for targeted relief within the constraints of the programme.
To offset the fiscal impact of any relief initiatives, the government plans to propose alternative revenue measures to the IMF. These include efforts to broaden the tax base and enhance revenue mobilization without imposing disproportionate burdens on existing taxpayers. The Federal Board of Revenue (FBR) has been tasked with boosting collections through additional and non-traditional sources during the current fiscal year.
Officials indicated that the government’s approach is centered on maintaining fiscal discipline while introducing selective, growth-supportive measures. This includes encouraging industrial activity, improving business confidence, and protecting salaried individuals who are particularly vulnerable to inflation and rising living costs.
The IMF programme has played a central role in restoring macroeconomic stability, with recent months marked by contained inflation, improved foreign exchange reserves, and a relatively stable exchange rate. However, the government faces growing pressure to translate stabilization gains into tangible relief and economic momentum, especially as the country navigates a challenging global and domestic economic environment.
As the February review mission approaches, the outcome of the negotiations will be closely watched by markets, investors, and policymakers. A successful review would not only unlock the next $1 billion tranche but also signal continued confidence in Pakistan’s reform trajectory. At the same time, the discussions are expected to test the government’s ability to strike a balance between adherence to IMF conditions and addressing domestic economic pressures through targeted and carefully calibrated policy measures.
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