ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have yet to finalize a staff-level agreement despite significant progress in discussions.
Both sides have been negotiating under the 37-month Extended Fund Facility (EFF), but frequent policy changes by Pakistan's authorities have led to delays. Finance Minister Mohammad Aurangzeb stated that while program implementation has been strong, differences over key issues, such as achieving a primary surplus of Rs2.4 trillion, the power sector's losses, state-owned enterprises (SOEs), and privatization delays, have hindered progress.
The IMF team, led by Nathan Porter, visited Islamabad and Karachi from February 24 to March 14, 2025, for the first review of Pakistan’s economic program supported by the EFF. Porter acknowledged that while substantial progress had been made, particularly on fiscal consolidation, energy sector reforms, and structural reforms to boost growth, the political leadership’s resistance to harsh conditions caused setbacks.
Discussions also advanced on Pakistan's climate reform agenda, which could be supported under the IMF's Resilience and Sustainability Facility (RSF) to mitigate natural disaster risks. The IMF team highlighted ongoing consultations on increasing the number of Point of Sale (POS) machines and implementing video surveillance of manufactured goods.
While the staff-level agreement has not yet been finalized, the IMF emphasized the importance of continuing discussions. The mission will continue virtually, with both sides aiming to conclude negotiations soon.
