ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have initiated discussions on the second review of the USD 7 billion Extended Fund Facility (EFF) programme and the first review of the Resilience and Sustainability Facility (RSF). The talks, which began on Monday, are aimed at assessing Pakistan’s fiscal performance, governance initiatives, and progress on structural reforms critical to the country’s economic stability.
The IMF mission is being led by Iva Petrova, Pakistan’s Mission Chief at the Fund, while the country’s economic team is headed by Finance Minister Muhammad Aurangzeb. The opening meeting was held at the Ministry of Finance and included the participation of Finance Secretary Imdadullah Bosal, State Bank of Pakistan Governor Jameel Ahmed, Federal Board of Revenue Chairman Rashid Mahmood Langrial, along with other senior policymakers.
During the session, Pakistan’s officials provided updates on key reform areas such as the National Fiscal Pact, capital market reforms, and greater transparency in development expenditures. IMF representatives placed particular emphasis on the Governance and Corruption Risk Assessment Report, anti-money laundering enforcement, and transparency in financial practices. The government was also urged to ensure strict implementation of measures aimed at tackling financial irregularities.
Technical-level discussions are underway and will be followed by policy-level negotiations later this week. If Pakistan successfully completes the review, it will unlock around USD 1 billion in financing after IMF Board approval. This will be accompanied by disbursements linked to the RSF, providing the government with additional fiscal support.
According to official sources, upcoming sessions will focus heavily on governance reforms and the oversight of the financial sector. A major portion of the dialogue will revolve around Pakistan’s e-PADS procurement system, with the IMF requesting detailed coverage, statistics, and results from external audit reviews. Strengthening exchanges of information with oversight institutions was also highlighted as a key expectation.
Another significant agenda item is Pakistan’s anti-money laundering framework. The IMF has expressed concern over persistent vulnerabilities related to trade-based money laundering. Discussions will examine Pakistan’s risk-based supervision of financial and non-financial entities, analyzing the impact of illicit financial flows on macroeconomic stability.
The IMF will further evaluate Pakistan’s progress on establishing a robust beneficial ownership registry and improving the supervision of designated non-financial businesses and professions. These reforms are intended to align the country’s compliance with international standards and reduce exposure to financial crimes.
Provincial participation has also been included in the talks. Sindh, Khyber Pakhtunkhwa, and Balochistan joined Monday’s sessions, while Punjab is expected to take part in discussions scheduled for Tuesday. The devastating floods and their economic impact were raised during the meetings, with Balochistan officials reporting no significant losses. Prime Minister Shehbaz Sharif has urged the IMF to factor the broader impact of climate-related disasters into the review process.
As the technical negotiations proceed, Pakistan faces mounting pressure to deliver on its commitments, not only to secure financing but also to rebuild confidence among global lenders and investors. The outcomes of these talks will play a crucial role in shaping the country’s fiscal trajectory over the coming months, particularly at a time when the economy remains under stress from external shocks and domestic challenges.
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