Islamabad, Pakistan – The International Monetary Fund (IMF) and Pakistan have made substantial progress in negotiations to reach a Staff-Level Agreement (SLA) under the ongoing 37-month Extended Arrangement supported by the Extended Fund Facility (EFF).
This development marks a crucial step in Pakistan’s continued engagement with the IMF to stabilize its economy and implement necessary reforms.
A delegation from the IMF, led by Nathan Porter, visited Islamabad and Karachi between February 24 and March 14, 2025, to assess Pakistan’s economic policies under the EFF. Additionally, discussions were held regarding a potential new arrangement under the IMF’s Resilience and Sustainability Facility (RSF). The visit included in-depth evaluations of Pakistan’s fiscal and monetary policies, structural reforms, and broader economic outlook.
In a statement following the discussions, Mr. Porter acknowledged the significant headway made, emphasizing that program implementation remains strong. The negotiations covered key areas such as Pakistan’s fiscal consolidation strategy, aimed at reducing public debt in a sustainable manner. Furthermore, the IMF commended Pakistan’s efforts to maintain a tight monetary policy, ensuring inflation remains under control while fostering economic stability.
Another key area of focus was Pakistan’s energy sector, where both parties discussed accelerating cost-reducing reforms to enhance financial viability. The IMF recognized the country’s commitment to structural economic reforms, which are intended to drive long-term growth while safeguarding essential social protection programs. Strengthening public investment in education and healthcare was also highlighted as a priority.
The IMF further engaged with Pakistani authorities on climate-related reforms to address vulnerabilities associated with natural disaster risks. These discussions explored policy measures that could potentially be supported under the RSF, reinforcing Pakistan’s commitment to environmental sustainability and disaster preparedness.
While significant progress has been made, further discussions are required to finalize the agreement. The IMF and Pakistan have agreed to continue policy discussions virtually in the coming days to address remaining details and ensure a smooth path forward.
The IMF team expressed gratitude to the Pakistani authorities, private sector representatives, and development partners for their collaboration and hospitality during the mission. As Pakistan seeks economic stability and resilience, the ongoing partnership with the IMF remains a cornerstone of its reform strategy.