Pakistan and the International Monetary Fund (IMF) have formally begun discussions for the latest reviews of the country’s economic reform programme and climate-focused financing arrangement, with the talks potentially paving the way for around $1.2 billion in additional disbursements.
Finance Minister Muhammad Aurangzeb held a kick-off meeting with an IMF mission led by Iva Petrova on September 29. The mission is in Islamabad to conduct the fourth review of Pakistan’s $7 billion Extended Fund Facility (EFF) arrangement and the third review of the Resilience and Sustainability Facility (RSF).
The 37-month EFF programme was approved by the IMF Executive Board in September 2024. The programme is aimed at strengthening Pakistan’s macroeconomic stability, broadening the tax base, rebuilding foreign exchange reserves, improving the financial position of the energy sector and advancing reforms in state-owned enterprises and other areas of the economy.
The RSF is a separate IMF facility focused on longer-term climate-related reforms. Pakistan’s RSF arrangement is valued at about $1.4 billion. It supports measures related to climate resilience, disaster preparedness, water management and the integration of climate risks into public investment and policymaking.
If the latest reviews are completed successfully and subsequently approved by the IMF Executive Board, Pakistan could receive approximately $1 billion under the EFF and around $200 million under the RSF. This would bring the potential combined disbursement to about $1.2 billion.
The latest discussions follow the IMF Executive Board’s completion of Pakistan’s third EFF review and second RSF review in May 2026. At that time, the IMF approved an immediate disbursement of approximately $1.1 billion under the EFF and around $220 million under the RSF. The IMF said total disbursements under the two arrangements had reached approximately $4.8 billion following those payments.
During the September 29 kick-off meeting, Aurangzeb briefed the IMF mission on recent macroeconomic developments, changes in key economic indicators, Pakistan’s credit rating and the country’s investment climate. The discussions are taking place as Pakistan faces external economic pressures, including higher fuel costs and uncertainty linked to disruptions in regional energy markets.
The IMF mission arrived in Pakistan on September 23 and held preliminary meetings with officials and institutions, including the State Bank of Pakistan, the Finance Ministry, the Federal Board of Revenue and other government departments. The mission also engaged with provincial finance officials.
Several reform areas are expected to feature in the review process. These include taxation, public procurement, energy-sector reforms, state-owned enterprises and the implementation of commitments under the EFF programme. Pakistan has also been addressing structural benchmarks related to the governance framework for state-owned enterprises.
The government recently notified the Public Procurement Rules 2026, replacing the previous 2004 framework. The new rules introduce measures including mandatory use of the E-Pak Acquisition and Disposal System (EPADS), procurement cells and mechanisms intended to strengthen transparency and oversight.
The IMF review will determine whether Pakistan has met the agreed programme requirements and whether any corrective measures or waivers are required. Any financing resulting from the reviews would remain subject to agreement between IMF staff and Pakistani authorities and approval by the IMF Executive Board.
The latest talks therefore represent another stage in Pakistan’s ongoing IMF-supported economic reform programme, with the outcome expected to determine the release of the next tranche of financing under both the economic and climate-related arrangements.
