Pakistan and the International Monetary Fund have not reached a staff-level agreement within the scheduled timeframe on the latest review of the country’s bailout program, with negotiations set to continue in the coming days, officials said.
An IMF mission led by Iva Petrova held discussions with Pakistani authorities on the third review of the 37-month Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF). The talks took place in Karachi and Islamabad, as well as virtually, from February 25 to March 11, 2026.
The IMF said considerable progress was made during the discussions, but talks will continue to more fully assess the impact of recent global developments on Pakistan’s economy and the EFF-supported program.
Petrova said the program’s implementation remained broadly aligned with Pakistan’s commitments through the end of February 2026. Discussions focused on sustaining fiscal consolidation to strengthen public finances, maintaining tight monetary policy to keep inflation within the State Bank of Pakistan’s target range, and advancing reforms to improve the viability of the country’s energy sector.
The talks also emphasized structural reforms aimed at accelerating economic growth, strengthening social protection, and rebuilding spending on health and education. Petrova noted that “particular attention was paid to deepening structural reforms, given the authorities’ emphasis on accelerating growth alongside efforts to strengthen social protection and rebuild health and education spending. These discussions are ongoing.”
Separately, the IMF highlighted progress on reforms designed to enhance climate resilience under the RSF framework.
Officials also reviewed the potential economic impact of the ongoing conflict in the Middle East, particularly on Pakistan’s balance of payments and external financing needs, amid volatile and rising global energy prices and tighter financial conditions.
According to sources familiar with the discussions, the volatile environment has made key projections increasingly uncertain. Pakistan’s oil import bill, for example, cannot be estimated precisely amid rapidly shifting global energy prices and supply risks.
Officials also noted that the impact on export orders remains unclear, particularly if the Middle East crisis persists or causes a prolonged disruption of shipping through the Strait of Hormuz, a key global oil transit route.
As a result, projections for the country’s current account, trade balance, and fiscal position remain fluid despite the availability of standard forecasting models, the sources said.
The IMF said discussions with Pakistani authorities will continue with the aim of reaching an agreement in the coming days.
