Pakistan, IMF near deal on review, $1.2bn disbursement in sight

October 05, 2026 (MLN): Pakistan and the International Monetary Fund (IMF) are nearing the completion of discussions on the latest review of the country’s economic program, with negotiations expected to conclude by October 7, according to people familiar with the matter.

Completion of the review would pave the way for the IMF to recommend the release of around $1.2 billion to Pakistan under the existing program, the sources said.

Most of the agreed targets have already been achieved, while the government and the IMF mission are working to resolve nine remaining tables as discussions enter their final stage.

Prime Minister Shehbaz Sharif is also expected to meet the IMF delegation soon to receive an update on the progress of the review, according to the sources.

The review is taking place amid stronger tax collection and continued efforts by the government to implement structural reforms. The IMF has received briefings on developments at the Securities and Exchange Commission of Pakistan (SECP) as well as progress on the government’s privatization agenda.

The government has also updated the Fund on plans to privatize three electricity distribution companies, including expressions of interest received for the proposed transactions.

Revenue collection has been one of the key positives during the review. The Federal Board of Revenue (FBR) collected PKR 3,043 billion during July-September, meeting its first-quarter target, the sources said.

The improved revenue performance has strengthened the IMF’s confidence that Pakistan can achieve its full-year tax collection target without introducing additional tax measures, effectively reducing the likelihood of a mini-budget or new taxation during the current fiscal year.

The IMF has also expressed satisfaction with the implementation of the government’s economic policies and the performance of Finance Minister Muhammad Aurangzeb, according to the sources.

A key issue still under discussion is the tax treatment of electric vehicles under the government’s auto policy. Pakistan and the IMF are expected to hold final talks on a proposal to raise sales tax on electric vehicles from 1% to 18%.

The two sides have also reviewed Pakistan’s fiscal and external position amid the ongoing Middle East crisis. Despite regional uncertainty, the IMF remains satisfied with Pakistan’s economic growth and efforts to contain fiscal and external imbalances, the sources said.

Pakistan has assured the Fund that it intends to move toward finalizing a new National Finance Commission award after December.

Progress on other structural commitments, including privatization and regulatory reforms, has also been shared with the IMF.

Once the outstanding issues are settled, the IMF mission is expected to conclude the review and recommend the next disbursement, which would then proceed through the Fund’s formal approval process.

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