Pakistan and the International Monetary Fund (IMF) are set to begin fresh negotiations on Monday, with discussions expected to continue until October 7. The talks will focus on Pakistan’s economic performance and progress under its existing IMF programme. According to sources, officials will also hold special sessions on the Petroleum Development Levy (PDL).
IMF to Review Pakistan’s Economic Performance
The IMF delegation will conduct the fourth review of Pakistan’s performance under the current loan programme during the first week of talks. The delegation is also expected to meet Finance Minister Muhammad Aurangzeb. Meanwhile, policy-level discussions on the next loan tranche will take place during the first week of October.
Pakistan and the IMF have been working under a 37-month Extended Fund Facility (EFF). The programme also includes a Resilience and Sustainability Facility (RSF).
If Pakistan meets the required programme conditions, sources said the IMF could approve the next tranche.
Petroleum Levy Becomes Key Discussion Point
The petroleum levy will receive particular attention during the negotiations. According to Finance Ministry sources, Pakistan collected Rs1,567 billion through the PDL by June 2026. This exceeded the government’s target of Rs1,468 billion by Rs99 billion.
The revenue performance will form part of Pakistan’s briefing on tax and non-tax collections recorded through June 30.
However, the Finance Ministry recently rejected reports describing the petroleum levy as the central point of the IMF programme. The ministry said such reports were misleading.
IMF to Review Petrol Subsidy Scheme
Pakistan will also brief the IMF on Prime Minister Shehbaz Sharif’s proposed petrol subsidy scheme.
The government is expected to explain the scheme and its potential fiscal implications during the negotiations. At the same time, Pakistani officials will present progress on revenue collection and other economic targets.
Finance Ministry sources said Pakistan has achieved most of its economic targets under the programme.
Next Loan Tranche Under Discussion
The upcoming review carries significance for Pakistan because a successful assessment could unlock another IMF disbursement.
The IMF approved a staff-level agreement for Pakistan’s third EFF review and second RSF review in March 2026. That agreement covered about $1 billion under the EFF and $210 million under the RSF, subject to Executive Board approval.
The latest negotiations will assess Pakistan’s performance against the conditions attached to the current programme. Therefore, the outcome will determine whether the country can move closer to securing the next scheduled financing.
Pakistan Faces Continued Fiscal Pressure
The talks come as Pakistan continues implementing fiscal and structural reforms under the IMF programme.
The IMF’s latest programme documents highlight reforms involving public finances, energy-sector viability, inflation management and structural changes. The programme also includes measures linked to fuel pricing and revenue mobilisation.
Meanwhile, Pakistan continues to meet its financial obligations to the IMF. The Fund’s latest payment schedule shows several repayments and charges falling due during September and October 2026.
As negotiations begin, both sides will review Pakistan’s economic performance and remaining programme requirements.
For now, the approval of any new tranche remains subject to the outcome of the review and subsequent IMF processes.
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