Pakistan is optimistic about finalising a staff-level agreement (SLA) with the International Monetary Fund (IMF) during Finance Minister Muhammad Aurangzeb’s upcoming visit to the United States.
The agreement hinges on consensus regarding the external account, verified flood-related losses, and their fiscal adjustments across federal and provincial levels. Officials confirmed that the IMF had shared the draft Memorandum of Economic and Financial Policies (MEFP) before the mission concluded its two-week stay in Pakistan.
According to sources, Pakistan and the IMF were close to concluding the SLA, but two key MEFP tables required further adjustments. The latest foreign remittance data has reportedly improved Pakistan’s external position.
The State Bank of Pakistan (SBP) is expected to maintain its cautious monetary policy stance amid inflationary pressures, while flood-related fiscal losses are being finalised for verification.
The IMF mission praised Pakistan’s power division for surpassing performance indicators but urged timely tariff adjustments and subsidy disbursements to ensure sustainability.
The federal and provincial governments are required to maintain tight fiscal discipline, especially in development spending, while projects in flood-affected areas will remain suspended until fiscal adjustments are completed.
The Federal Board of Revenue (FBR) may revise its revenue target downward, with corrective measures planned for early 2026 to bridge potential gaps. Discussions on debt management and fiscal sustainability are also underway, with Pakistan’s debt indicators reportedly within safe limits.
Significant progress has been made toward the SLA under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). Pakistan expects to receive around $1.2 billion in combined disbursements next month upon IMF Board approval.
The IMF acknowledged Pakistan’s strong programme implementation, progress in fiscal consolidation, and commitment to reforms in governance, energy, and climate resilience.
