Pakistan, IMF kick off talks for fourth EFF, third RSF reviews

September 29, 2026 (MLN): The International Monetary Fund (IMF) mission, led by Iva Petrova, has begun discussions with Pakistan for the fourth review of the Extended Fund Facility (EFF) arrangement and the third review of the Resilience and Sustainability Facility (RSF).

The IMF mission is currently in Islamabad for the latest assessment under both programmes.

The discussions formally kicked off at a meeting between the IMF delegation and Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, according to an update shared by the Ministry of Finance.

The IMF mission is in Islamabad to assess Pakistan’s performance under the Fund-supported programme. The review covers implementation through the end of June 2026 and will also examine the policy framework and reform measures for the period ahead.

Pakistan is currently implementing a 37-month, $7 billion EFF programme approved in September 2024, aimed at strengthening macroeconomic stability through fiscal consolidation, structural reforms and measures to support sustainable growth. The RSF focuses on reforms to strengthen Pakistan’s resilience to climate-related risks.

Successful completion of the two reviews would make Pakistan eligible for around $1 billion under the EFF, equivalent to 760 million Special Drawing Rights (SDRs), and another $200 million under the RSF, taking the potential combined disbursement to approximately $1.2 billion.

The funds would not be released immediately upon completion of the staff-level review. Any staff-level agreement would subsequently require approval by the IMF Executive Board before the disbursements can be made.

Current expectations are for the funds to be released by the end of November or early December, subject to completion of the required process.

The review is expected to place significant focus on Pakistan’s fiscal performance, revenue mobilisation and implementation of structural reforms.

A key issue is the Federal Board of Revenue’s (FBR) ability to meet its revenue commitments. The current review is particularly important as the programme includes the FBR’s first-ever half-yearly revenue collection structural benchmark, with the IMF expected to assess the tax authority’s performance and preparedness to meet the target.

Discussions are also expected to cover efforts to broaden the tax base, improve tax administration and strengthen provincial tax and non-tax revenue collection.

The review comes after Pakistan recorded a significant revenue shortfall against some programme expectations during the period under assessment. While overall fiscal performance through June 2026 has largely remained on track, official sources cited by Dawn reported slippages in parts of the policy matrix.

Energy-sector reforms are another major component of the negotiations.

The IMF is expected to review progress on reducing circular debt and improving the financial and operational performance of the energy sector. Discussions are also likely to cover measures aimed at improving efficiency, strengthening governance and addressing structural weaknesses in the power and gas sectors.

The government is also expected to brief the Fund on developments in the electricity sector and other measures being pursued under the ongoing reform programme.

The review will also assess Pakistan’s broader macroeconomic position, including the current account, foreign exchange reserves, exchange rate and primary fiscal balance.

These indicators will be considered alongside the government’s progress on fiscal consolidation and external-sector stability under the IMF programme. The Finance Ministry has previously highlighted improvements in fiscal and external balances, foreign exchange reserves, remittances and the current account position during its engagements with IMF senior management.

The latest talks also come against a backdrop of heightened external risks, including volatility in global energy markets, which could affect Pakistan’s import bill, inflation and external financing requirements.

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