Islamabad – Pakistan and the International Monetary Fund (IMF) have entered a crucial stage in their economic partnership, beginning the formal review of the Extended Fund Facility (EFF) on Monday, September 29, 2025. The discussions carry significant weight for Pakistan’s financial future, as the outcome will determine the next tranche of funding and signal the trajectory of ongoing reforms.
Before the official launch of the review, a preparatory technical-level meeting took place on Thursday. Hosted at a local hotel in Islamabad, the session brought together senior officials of the Federal Board of Revenue (FBR) and the IMF mission team. The FBR chairman led the briefing, offering a comprehensive presentation of the authority’s revenue data, fiscal performance, and strategies to overcome collection shortfalls.
According to sources, the FBR highlighted achievements made in the first quarter of the fiscal year but also candidly acknowledged existing gaps. The impact of recent natural disasters, particularly floods that disrupted economic activity across key sectors, was a central theme of the discussions. The IMF delegation closely reviewed the tax authority’s plans to enhance compliance and broaden the base, both of which are critical elements for ensuring fiscal sustainability.
The formal review is not limited to revenue matters. In the coming days, the IMF team will engage with a broader range of stakeholders, including the Ministry of Finance, the State Bank of Pakistan (SBP), and provincial governments. These sessions are expected to cover monetary policy, fiscal discipline, external account stability, and the structural reforms outlined in the IMF program.
Finance Minister Muhammad Aurangzeb is scheduled to meet the IMF delegation on Monday. His meeting will assess the progress of the technical-level talks and provide an opportunity for the government to present its fiscal and economic roadmap. Analysts believe the minister’s engagement will be pivotal in aligning Pakistan’s reform commitments with IMF expectations, especially in areas such as tax collection efficiency, energy sector management, and social protection spending.
The IMF mission, led by Ms. Iva Petrova, Pakistan’s Mission Chief at the Fund, will also review progress under the Resilience and Sustainability Facility (RSF). This facility, launched alongside the EFF, aims to help countries adapt to climate-related challenges while maintaining macroeconomic stability. For Pakistan, which continues to grapple with the aftermath of devastating floods and climate-induced disruptions, the RSF review holds particular importance.
The outcome of the EFF review will have wide-ranging implications. A successful assessment could unlock the release of much-needed funds, bolster foreign exchange reserves, and restore investor confidence in Pakistan’s economic management. Conversely, failure to meet program targets could complicate access to international financing and intensify external pressures at a time when the country’s economy is navigating fragile recovery.
Market observers and economic analysts are closely monitoring the talks, noting that progress made in this review could set the tone for Pakistan’s economic performance in the months ahead. With inflationary pressures, energy sector liabilities, and fiscal discipline all under scrutiny, the IMF’s assessment will serve as both a test and an opportunity for the government to reaffirm its commitment to reform.
As Pakistan enters this critical review period, stakeholders across the financial and business spectrum await signals from Islamabad and the IMF. The decisions made in the coming days will be central to shaping the country’s economic outlook and its ability to navigate both domestic and global challenges.
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