The International Monetary Fund (IMF) announced on Thursday that it could not reach a staff-level agreement with Pakistan on the third review of the $7 billion Extended Fund Facility (EFF). The talks also included the second review of the Resilience and Sustainability Facility (RSF).
IMF advisor Iva Petrova said that while “considerable progress” was made, discussions will continue to assess the impact of recent global developments on Pakistan’s economy and the EFF program.
Virtual negotiations took place between February 25 and March 11, led by IMF mission chief Eva Petrova. Meetings were held in Karachi and Islamabad. According to the IMF, Pakistan’s implementation of the programme has broadly stayed in line with commitments.
The IMF highlighted Pakistan’s encouraging performance on climate-related targets under the EFF and the RSF programs. Pakistan is participating in the 28-month Resilience and Sustainability programme to address climate challenges and strengthen economic resilience.
During the talks, officials reviewed measures to reduce Pakistan’s fiscal deficit, improve public finances, and maintain tight monetary policy to control inflation. Reforms in the energy sector and efforts to improve efficiency were also discussed.
The IMF emphasized the importance of social spending, noting Pakistan’s progress on enhancing funding for health, education, and social protection. Climate-related reforms and their implementation were also acknowledged.
Global economic pressures, including rising energy prices and tensions in the Middle East, were cited as challenges that could affect program targets. These factors have prompted the IMF and Pakistan to plan further rounds of discussions to finalize a comprehensive agreement.
Pakistan’s economic team and the IMF are working to achieve a balanced agreement that ensures fiscal stability, promotes economic growth, and strengthens resilience against external shocks.
The continuation of negotiations reflects the complex economic environment Pakistan faces. Both sides remain committed to reaching a mutually beneficial outcome that supports long-term stability and sustainable development.
Further updates on the progress of talks are expected in the coming days as the IMF and Pakistani authorities continue to negotiate key aspects of the programs.
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