IMF Review Begins for Pakistan’s $7 Billion Loan and RSF
The IMF has started formal discussions with Pakistan’s economic authorities to review progress on the $7 billion Extended Financing Facility (EFF) and the $1.1 billion Resilience and Sustainability Facility (RSF). The two-week mission, which began with an opening meeting in Islamabad, will run through critical biannual targets set for December 2025. The delegation includes Pakistan’s finance minister, the governor of the central bank, the finance secretary, and the chairman of the Federal Board of Revenue, underscoring the scale and importance of this review for the country’s macroeconomic stability.
Performance Watch: Revenue Shortfalls vs Power Targets
Officials acknowledge that Pakistan’s performance under the program has been uneven. While the power sector targets were met by the end of June 2025, revenue collection lagged behind by about Rs 1.2 trillion, roughly 1% of GDP, in the last fiscal year. Early indicators for the first two months of the current year suggest the shortfalls persist. The IMF mission will assess what corrective measures are needed to bring revenue above target levels and what adjustments, if any, are required in expenditures or policy implementation to maintain fiscal discipline.
Forward-looking Measures and Targeted Reforms
Central to the mission’s discussions is the roadmap to meet the upcoming biannual benchmarks, with December 2025 serving as a critical milestone. Pakistan is seeking IMF support not only to steady the fiscal position but also to unlock investment in energy infrastructure, including a long-delayed refinery upgrade. The discussions will look at macroeconomic stabilization measures, tax administration improvements, and the pace of structural reforms that the fund has long supported.
Tax Reforms and Revenue Mobilisation
Revenue mobilisation remains a focal point. The IMF team is expected to review the efficiency of tax collection, broaden the tax base, and address outstanding inefficiencies in tax administration. Strengthening the Federal Board of Revenue’s capacity to close gaps, enhance compliance, and reduce leakages could be a central theme of negotiations. While the power sector has shown progress, sustainable fiscal consolidation will depend on translating revenue efforts into a credible path to debt reduction and budget discipline.
Energy Policy and the Brownfield Refinery Upgrade
A key feature of Pakistan’s reform agenda is the support for accelerating the brownfield petroleum refinery policy. Officials are pushing for upgrades that would enable production of petroleum products meeting European standards with lower carbon and sulfur emissions. The stalled upgrades have kept roughly $6 billion of fresh investment on hold, and the IMF mission will weigh policy steps to remove bottlenecks, align with RSF goals, and ensure that energy-sector reforms contribute to climate objectives without compromising energy security.
What Comes Next for Pakistan’s Economy
The ongoing discussions will shape not only the immediate policy mix but also Pakistan’s access to external financing and market confidence. If corrective measures are agreed and implemented, disbursements under the EFF and RSF could proceed in line with program milestones. The two-week mission will also map out the structural reforms needed to accelerate private investment, improve governance in revenue administration, and advance the refinery upgrade program while balancing growth with environmental safeguards. As Pakistan negotiates these steps, the IMF remains focused on delivering macroeconomic stability, energy resilience, and a credible path to sustainable development.
