Pakistan, IMF discuss ongoing programme, economic reforms

May 22, 2025 (MLN): To discuss the ongoing IMF programme and Pakistan’s economic outlook, Prime Minister Shehbaz Sharif met with an International Monetary Fund (IMF) delegation led by Jihad Azour, Director of the Middle East and Central Asia Department.

The talks focused on macroeconomic stability, institutional reforms, and Pakistan’s economic outlook under the ongoing IMF programme.

Finance Minister Muhammad Aurangzeb, Planning Minister Ahad Cheema, Finance Secretary Imdad Ullah Bosal, and FBR Chairman Amjad Zubair Tiwana also attended the meeting.

The Prime Minister expressed satisfaction over the progress made under the IMF-supported reform agenda, asserting that the country had achieved economic stability and was now on the path to growth.

He reaffirmed the government's commitment to accelerating reforms aimed at ensuring long-term sustainability, as per the press release.

The IMF team acknowledged the government's efforts to stabilise the economy and reiterated support for Pakistan’s reform process.

Pakistan has successfully met all seven quantitative performance criteria and five out of eight indicative targets as of December under the Extended Fund Facility (EFF), as per the IMF report.

The IMF’s review of the 37-month programme, which began in September 2024, praised the strong implementation of reforms, noting improvements in financial indicators, a current account surplus, and higher-than-expected foreign exchange reserves.

Inflation has fallen to record lows, although core inflation remains at around 9%. While growth in the first half of FY25 has lagged behind projections, fiscal performance remains steady, with a primary surplus achieved.

The Fund recommended continued efforts to broaden the tax base, manage debt, and allocate resources for development and social programmes.

It also stressed the importance of a data-driven monetary policy and flexible exchange rate to support reserve accumulation.

Reforms in the energy sector remain critical, particularly tariff adjustments to reduce fiscal pressure.

The IMF further encouraged structural changes in governance, trade, and investment frameworks to promote inclusive growth.

In light of the climate challenges facing Pakistan, the IMF proposed an arrangement under the Resilience and Sustainability Facility (RSF), granting access to SDR 1 billion (49.2% of quota).

The facility would help improve disaster preparedness, climate risk disclosures, and resource management, supporting Pakistan's climate mitigation agenda.

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