Pakistan and the International Monetary Fund (IMF) are expected to conclude review talks this week regarding the release of the fifth tranche under the country’s ongoing loan programme, according to sources. The discussions have progressed through technical-level negotiations, during which the IMF mission reportedly expressed satisfaction with the progress made by Pakistan’s economic team. The review is focused on the country’s performance against programme commitments, including revenue collection, energy sector reforms and other economic measures, with additional requirements expected to be addressed during policy-level negotiations.
Sources said Pakistan’s economic team has assured the IMF that a new National Finance Commission (NFC) Award will be finalized by December 2026. The NFC Award is an important component of Pakistan’s fiscal framework because it determines the distribution of certain financial resources between the federal and provincial governments. The commitment to finalize the new award by the end of the year has therefore been included in discussions between Pakistan and the Fund as part of the broader programme commitments being reviewed during the current negotiations.
The Federal Board of Revenue (FBR) has also assured the IMF that it will achieve the tax collection target established for the current fiscal year. According to sources, the IMF mission expressed satisfaction with the FBR’s revenue performance during the July to September quarter. Tax collection remains a key component of Pakistan’s economic reform programme, with revenue mobilisation playing an important role in strengthening government finances and meeting the fiscal objectives associated with the IMF programme. The discussions are expected to continue examining revenue performance and measures required to maintain progress toward the annual target.
Energy sector reforms have also remained a central part of the review talks. The IMF mission has stressed the need for Pakistan to continue implementing reforms and measures aimed at improving the performance of the energy sector. During the technical-level discussions, the mission reportedly expressed satisfaction with the overall performance of the power sector so far. However, the Fund has also emphasized that further steps are required to address persistent structural challenges affecting the sector.
Among the areas highlighted by the IMF are measures to reduce circular debt and losses incurred by power distribution companies, commonly known as DISCOs. Circular debt has remained a significant issue within Pakistan’s energy sector, affecting the financial position of various entities involved in power generation, transmission and distribution. The IMF has also emphasized the completion of steps related to the privatization of DISCOs as part of efforts to improve the efficiency and financial sustainability of the power distribution system.
The remaining discussions are expected to focus on additional measures during policy-level negotiations. Concrete proposals concerning economic reforms, FBR revenue collection and other commitments under the programme will form part of these discussions. While technical-level talks have reportedly made progress, the finalization of the review will depend on agreement over the outstanding policy measures and commitments. The policy-level stage will therefore determine the specific actions Pakistan will undertake as part of the next phase of the programme.
The successful completion of the review would allow the IMF mission to issue a statement outlining the outcome of the negotiations. However, completion of the review itself would not immediately result in the release of the fifth tranche. The disbursement will remain subject to approval by the IMF Executive Board, which must consider and approve the review before the funds can be released under the programme.
Pakistan’s latest IMF review is taking place as the government continues to work on fiscal, revenue and energy-sector measures linked to the broader economic programme. The commitments concerning the NFC Award, tax collection, circular debt, DISCO losses and privatization are among the areas being monitored as part of the review process. With negotiations expected to conclude this week, the focus will now shift toward the policy-level discussions and the subsequent IMF Executive Board process required for the fifth tranche.
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