Pakistan is approaching a crucial milestone in its ongoing engagement with the International Monetary Fund, as Finance Minister Muhammad Aurangzeb indicated that a staff-level agreement (SLA) for a $1.2 billion payout is likely to be reached this week. This development follows intensive discussions between Pakistani officials and the IMF mission led by Iva Petrova, focused on reviewing the $7 billion Extended Fund Facility and the $1.1 billion Resilience and Sustainability Facility.
Aurangzeb, speaking to Reuters on the sidelines of the IMF and World Bank annual meetings in Washington, expressed confidence that the agreement could be finalized within days. He noted that the dialogue with the IMF was constructive, particularly around key performance benchmarks. He said the mission remained engaged through follow-up discussions aimed at closing the remaining gaps.
This SLA is a critical step to unlock the next tranche of IMF funding. Pakistan, like other programme countries, must successfully pass periodic reviews before funds are disbursed. If concluded, the agreement will enable a disbursement of $1.24 billion, providing support to Pakistan’s economic stability programme. Official sources suggested that no immediate tax measures are expected, though the tax target may be revised depending on upcoming GDP data due in December.
Pakistan’s economy remains under pressure, with fiscal targets and external financing posing persistent challenges. Prime Minister Shehbaz Sharif previously urged the IMF to consider the impact of recent flood damages during its review. The IMF programme, initiated in July of the previous year, was designed to restore macroeconomic stability and lay the groundwork for sustainable growth. In May, the IMF board also approved a $1 billion climate resilience loan, contingent on review outcomes.
Privatisation is a parallel priority under the government’s economic reform agenda. Aurangzeb emphasized that the planned sale of key state-owned entities, including Pakistan International Airlines, is expected to accelerate. The finance minister expressed optimism about the level of interest from qualified bidders after lucrative European and British routes were reopened. This move could mark the first major privatisation in nearly two decades.
The government is also preparing to issue a green Panda bond, its first yuan-denominated bond, by the end of the year. Aurangzeb confirmed that Pakistan intends to re-enter international capital markets next year with a bond sale of at least $1 billion, exploring multiple instruments including Eurobonds and Sukuk.
During his visit to Washington, Aurangzeb met with IMF’s Middle East and Central Asia Department Director Jihad Azour to discuss the reform agenda. He also held extensive engagements with senior World Bank officials, focusing on climate adaptation and resilience. He underscored the urgency of enhanced investments to address climate risks, particularly after devastating floods affected agricultural output and GDP growth.
The finance minister attended the Commonwealth Finance Ministers’ Meeting, supporting initiatives to strengthen financial resilience. He highlighted the importance of operationalizing climate financing mechanisms, including the Loss and Damage Fund, to support vulnerable economies.
Aurangzeb’s schedule also included meetings with international business leaders and investors, including discussions with the US-Pakistan Business Council, US Treasury officials, and representatives of Citi Bank. He showcased Pakistan’s improving macroeconomic indicators, ongoing structural reforms, and its evolving role as a regional hub for digital financial services.
The minister’s engagements in Washington are aimed at securing the next IMF tranche, accelerating privatisation plans, attracting investment, and enhancing cooperation with global financial institutions. The meetings also signal Pakistan’s intent to strengthen its external financing position and boost investor confidence.
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