Pakistan and the International Monetary Fund (IMF) were unable to finalize a staff-level agreement after two weeks of intensive virtual negotiations over the $7 billion Extended Fund Facility (EFF) program and the second review of the Rapid Financing Instrument (RSF).
Despite the lack of a formal deal, both sides reported significant progress, and discussions are expected to continue in the coming days. The talks, running from February 25 to March 11, focused on macroeconomic reforms, social sector spending, and structural improvements in Pakistan’s economy.
The IMF emphasized the urgent need for Pakistan to maintain strict monetary policy to control inflation. Meanwhile, Pakistan’s commitments to fiscal discipline, including reducing the fiscal deficit and strengthening public finances, were largely on track according to officials. Energy sector reforms to improve efficiency also featured prominently in the discussions.
Iva Petrova, head of the IMF mission, said talks covered social protection programs, healthcare, and education spending, alongside climate change reforms and the economic impacts of the ongoing Middle East conflict.
The IMF highlighted global concerns about rising energy prices and financial pressures on emerging economies, stressing that Pakistan’s economic management remains critical to maintain stability and investor confidence.
If the review is successfully completed, Pakistan could unlock approximately $1 billion under the EFF and $200 million under the RSF by the end of April — a crucial lifeline for the country’s struggling economy.
Also read: IMF Projects Inflation Rise in Pakistan
