Overview: IMF Kick-off in Pakistan
An IMF mission formally launched its review of Pakistan’s economic program, signaling the start of the biannual assessment of the $7 billion Extended Financing Facility (EFF) and the $1.1 billion Resilience and Sustainability Facility (RSF). The session, reported by Dawn on September 30, 2025, followed a preliminary kick-off meeting on September 29, 2025, with Pakistan’s economic team. The mission is led by Pakistan’s IMF Mission Chief Iva Petrova, and the Pakistani delegation is headed by Finance Minister Muhammad Aurangzeb. The opening session was attended by senior officials including the Governor of the State Bank of Pakistan, the Finance Secretary, and the Chairman of the Federal Board of Revenue (FBR).
According to media coverage, the mission will stay in Pakistan for nearly two weeks to review implementation of both facilities and to agree on corrective actions as needed to stay on track for the program’s targets. The talks aim to push faster corrective measures and clarify next steps for the December 2025 target window.
Performance Snapshot Through End-June 2025
The Dawn report cited a mixed performance for the period under review, ending June 2025. While the power sector benchmarks were comfortably met, the program’s revenue performance fell short. Revenue collection missed by roughly ₹1.2 trillion, about 1% of GDP, over the last fiscal year, with similar shortfalls observed in the first two months of the current fiscal year. This divergence between revenue performance and expenditure targets has become a focal point in the ongoing discussions with the IMF team.
With the new review period running through December 2025, officials and IMF representatives will work to identify concrete corrective measures to address these gaps and ensure the next biannual targets are attainable. The discussions will also consider adjustments to policy measures that can sustain macro stability while supporting growth in a challenging external environment.
Key Issues on the Table
Beyond revenue mobilisation, the talks are likely to cover fiscal measures, energy pricing reforms, and structural steps designed to bolster resilience. A notable policy item highlighted in the discussion is the brownfield petroleum refinery policy, which has faced delays but is tied to RSF objectives. Officials argue that advancing refinery upgrades could help produce petroleum products meeting European standards with lower carbon and sulfur emissions, aligning with RSF goals and broader climate considerations.
Policy Reform and Investment Implications
Pakistan’s engagement with the IMF continues to stress reforms aimed at expanding the tax base, improving revenue collection efficiency, and accelerating the implementation of capital projects that support productive capacity. The stalled refinery policy represents a significant investment barrier that, if unlocked, could attract billions in fresh investment for upgrades and modernization. IMF officials have historically emphasised that such reforms are essential not only for near-term program targets but also for sustainable long-run growth and debt sustainability.
What Happens Next
The IMF mission’s stay in Pakistan will focus on negotiating corrective actions and validating the authorities’ roadmap to meet the December 2025 milestones. The outcome of these talks will influence disbursement decisions under the EFF and RSF, as well as the broader calendar of program reviews. Given the revenue shortfalls observed thus far, the talks are expected to prioritize tax policy simplifications, broader tax administration improvements, and targeted revenue-enhancing measures that can be implemented without hindering growth.
Implications for Pakistan’s Economy
As Pakistan navigates fiscal consolidation amid domestic headwinds and global uncertainties, the IMF review underscores the urgency of timely reforms and credible macroeconomic management. The next two weeks of engagement will be closely watched by markets, policymakers, and observers as they determine the pace and scope of reforms that can restore investor confidence, stabilize the external sector, and move the economy toward a more sustainable growth path.
