IMF mission to arrive in Pakistan on Sept 23

An International Monetary Fund (IMF) mission will arrive in Pakistan on September 23 to conduct a detailed assessment of the country’s economic performance and progress under its ongoing financial programmes.

The mission, led by Iva Petrova, is expected to remain in Pakistan for almost two weeks, with discussions likely to continue until the first week of October. The talks will cover the $7 billion Extended Fund Facility (EFF) as well as the $1.4 billion Resilience and Sustainability Facility (RSF).

The upcoming visit will include the fourth review of Pakistan’s EFF programme and the third review under the RSF arrangement. The discussions will assess Pakistan’s performance against targets set for the period ending June 30, 2026, while also examining the government’s plans for the current fiscal year.

The IMF team is expected to begin technical discussions at the State Bank of Pakistan. It will then hold meetings with officials from different economic ministries and departments. An opening meeting with Finance Minister Muhammad Aurangzeb is also expected as part of the review process.

Revenue collection is likely to be one of the key issues during the talks. The IMF will assess the Federal Board of Revenue’s (FBR) preparedness to meet its first half-yearly revenue collection structural benchmark under the current programme.

The revenue target is particularly significant because the FBR has faced repeated difficulties in achieving its annual collection goals. IMF officials are therefore expected to examine the measures being taken to strengthen tax collection, broaden the tax base and improve compliance.

The review will also take into account major fiscal developments involving the provinces. Provincial governments have agreed to transfer more than Rs1.035 trillion of their National Finance Commission shares to the federal government during the current fiscal year for spending related to national security and water resources.

The provinces have also committed a separate cash surplus of around Rs1.8 trillion as part of the commitments made under the IMF programme.

Pakistan’s performance against the end-June targets has generally remained on track in several areas. However, significant challenges remain, particularly on revenue collection and some policy commitments.

Government intervention in commodity markets is expected to be another important issue. The authorities’ involvement in wheat and sugar operations has raised concerns about compliance with the IMF’s requirement to limit government intervention in commodity markets.

The upcoming discussions will therefore involve both an assessment of Pakistan’s past performance and negotiations over future policy measures. The government and IMF will need to agree on how outstanding commitments will be addressed during the next phase of the programme.

Economic governance and anti-corruption reforms are also expected to come under scrutiny.

Pakistan had committed to implementing a broad set of reforms following an IMF assessment that identified weaknesses in governance and efforts to tackle corruption. However, progress on these commitments has reportedly been slower than required.

Only a small number of the more than three dozen governance-related targets set for the January-June 2026 period are believed to have been completed.

Public procurement is among the areas facing continued challenges. Although steps have been taken to improve transparency in procurement by state-owned enterprises, concerns remain over the continued use of direct contracting without open competitive bidding.

There have also been instances in which tenders were issued after projects had already been completed through selected contractors. Such practices can undermine competition and transparency while potentially increasing the cost of public projects.

The government is expected to face questions over rules designed to prevent preferential treatment in procurement. The required regulations have yet to be fully approved, leaving an important governance reform incomplete.

Monetary and fiscal performance, meanwhile, is expected to receive detailed attention during the review. Officials will assess whether Pakistan has maintained the required policy discipline and whether measures taken so far are sufficient to preserve macroeconomic stability.

Successful completion of the reviews would allow Pakistan to access fresh funding under both IMF arrangements.

The country could become eligible for around $1 billion under the EFF, equivalent to approximately 760 million Special Drawing Rights. An additional $200 million could be released under the RSF.

The disbursements are expected by the end of November or early December if the reviews are successfully completed and subsequently approved through the IMF’s required process.

Pakistan is currently implementing a 37-month, $7 billion IMF programme aimed at stabilising the economy and addressing longstanding structural weaknesses. The programme focuses on fiscal discipline, stronger revenue mobilisation, economic reforms, improved governance and measures to support sustainable growth.