The International Monetary Fund has stated that Pakistan’s policy measures under its Extended Fund Facility programme have helped stabilise the economy and rebuild market confidence, describing the country’s fiscal performance as strong. The assessment comes ahead of a new round of review talks that will determine the release of the next tranche of funding under the ongoing programme.
Speaking at a weekly press briefing, IMF Communications Director Julie Kozack said that a staff team is scheduled to visit Pakistan from February 25 to initiate discussions on the third review under the Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF). The outcome of these discussions will shape the next phase of disbursements linked to reform benchmarks agreed between Islamabad and the Fund.
Kozack noted that Pakistan has recorded a primary fiscal surplus of 1.3% of gross domestic product in fiscal year 2025, describing it as in line with programme targets. She added that headline inflation has remained relatively contained, while the country posted its first current account surplus in 14 years during fiscal year 2025. The combination of fiscal consolidation, external balance improvement and easing price pressures reflects what the Fund views as progress under the reform framework.
The IMF official also referred to the recent publication of the Governance and Corruption Diagnostic Report on Pakistan. According to Kozack, the report outlines proposals for structural reforms, including simplifying tax policy design, levelling the playing field in public procurement processes, and improving transparency in asset declarations. These governance-focused recommendations expand the reform agenda beyond traditional macroeconomic indicators and place emphasis on institutional strengthening.
The upcoming review discussions will assess Pakistan’s performance under the EFF and RSF arrangements and evaluate compliance with quantitative targets and structural benchmarks. A key focus of the talks will be implementation of the Governance and Corruption Diagnostic Report as well as progress under the National Fiscal Pact. These elements are expected to be central to deliberations regarding the release of the next loan tranches worth $1.2 billion.
The IMF’s growing attention to governance reforms and institutional accountability signals a broader shift in engagement, with equal weight now given to structural issues often considered underlying drivers of tax evasion, weak compliance and corruption. This expanded focus underscores the lender’s emphasis on durable reform outcomes rather than short-term macroeconomic stabilisation alone.
Progress on governance reforms and fiscal coordination between federal and provincial authorities may also determine whether the IMF dispatches a technical assistance mission to Pakistan, a step that federal authorities have so far resisted. The possibility of such a mission indicates continued scrutiny of implementation capacity and reform execution.
The IMF delegation, led by Mission Chief for Pakistan Iva Petrova, will begin its visit in Karachi on February 25. The team is scheduled to hold initial discussions exclusively with the State Bank of Pakistan before travelling to Islamabad. Formal talks with federal and provincial governments are set to commence on March 2 and are expected to conclude by March 11.
The review period comes at a critical juncture as Pakistan seeks to consolidate recent macroeconomic gains and secure continued external financing support. The outcome of the February-March discussions will determine whether the Fund proceeds with the next disbursement and how it evaluates the country’s trajectory under the EFF and RSF frameworks.
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