ISLAMABAD: The mission of the International Monetary Fund (IMF) on Thursday confirmed that it could not reach a staff-level agreement (SLA) with Pakistan on the third review of the country’s $7 billion Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF), although discussions made considerable progress.
In its end-of-mission statement, the IMF said the delegation, led by Iva Petrova, held detailed talks with Pakistani authorities in Karachi and Islamabad, as well as virtually, from February 25 to March 11.
“While considerable progress was made in the discussions, these will continue in the coming days, including to more fully assess the impact of recent global developments on Pakistan’s economy and the EFF-supported programme,” Petrova said.
The IMF noted that programme implementation under the EFF remained broadly aligned with the authorities’ commitments through the end of February.
According to the statement, discussions focused on key policy areas including sustaining fiscal consolidation to strengthen public finances, maintaining a sufficiently tight monetary policy to keep inflation within the target range set by the State Bank of Pakistan, and advancing reforms to improve the viability of the energy sector.
The talks also emphasized the need to deepen structural reforms aimed at accelerating economic growth, strengthening social protection programs, and rebuilding spending in critical sectors such as health and education.
The IMF further acknowledged “good progress” by Pakistani authorities in implementing reforms designed to enhance climate resilience, including measures under the RSF programme.
The discussions also reviewed the potential impact of the ongoing Middle East conflict on Pakistan’s economic outlook, particularly its balance of payments and external financing needs amid volatile global energy prices and tightening financial conditions.
The IMF mission had been engaged in negotiations with Pakistani officials since February 25 for the third review of the EFF programme and the second review of the RSF facility. Talks shifted to virtual meetings on March 3 following escalating tensions in the Middle East.
If the review is successfully completed, Pakistan would become eligible to receive about $1 billion (760 million Special Drawing Rights) under the EFF, along with an additional $200 million under the RSF by the end of April.
Story by Khaleeq Kiani
