The International Monetary Fund (IMF) mission has officially started its second review talks in Pakistan under the $7 billion Extended Fund Facility (EFF). The government is aiming to unlock the next $1 billion tranche by meeting reform benchmarks and addressing fiscal challenges.
According to officials, the Federal Board of Revenue (FBR) briefed the IMF team on its recent revenue performance. During the session, the FBR presented an alternative tax plan to compensate for the emerging shortfall in collections. The mission was also informed about the significant fiscal impact of last year’s devastating floods, which severely disrupted Pakistan’s economy.
The Ministry of Finance provided the IMF delegation with a comprehensive overview of the macroeconomic situation. Discussions included strategies for boosting provincial revenues, fiscal reforms, and possible relief packages for flood-affected communities. These talks highlight the government’s attempt to balance revenue targets with social protection measures.
The IMF mission will stay in Pakistan until October 8. Technical-level discussions will take place in the early phase, followed by policy-level negotiations. During this period, meetings are scheduled with multiple institutions, including the Ministry of Finance, Ministry of Energy, Ministry of Planning, the State Bank of Pakistan, OGRA, NEPRA, and the FBR.
Additionally, consultations will also be held with provincial governments of Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan. These sessions aim to strengthen coordination on revenue measures and expenditure management at the provincial level.
While Pakistani authorities have proposed relief measures for vulnerable groups, insiders believe the IMF may remain firm on its policy targets. The Fund has repeatedly emphasized the importance of structural reforms, tax compliance, and fiscal discipline to ensure economic stability.
Securing the next tranche is crucial for Pakistan, given the pressing need to stabilize foreign reserves, manage debt obligations, and maintain investor confidence. Economic experts stress that failure to meet IMF conditions could create further pressure on exchange rates and inflation.
The government is therefore under significant pressure to strike a balance between implementing tough reforms and addressing public concerns. Relief for flood victims remains a priority, but the IMF’s focus on sustainable fiscal consolidation is likely to shape the final outcome of the review.
The second review is seen as a critical test for Pakistan’s economic management. Unlocking the $1 billion tranche will not only provide immediate financial support but also influence future global lending and investment decisions.
