IMF, Pakistan near staff-level deal on EFF and RSF reviews
The IMF and Pakistan have made significant progress toward a staff-level agreement under the Extended Fund Facility and Resilience and Sustainability Facility during detailed talks in Karachi and Islamabad.
An International Monetary Fund (IMF) mission led by Iva Petrova concluded its visit to Pakistan on October 8, 2025. It reports “significant progress” toward reaching a staff-level agreement (SLA) under two major lending programs — the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).
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IMF team visited Pakistan from September 24 to October 8 in Karachi and Islamabad. It has reviewed Pakistan’s economic performance under ongoing arrangements totaling more than $7 billion.
According to the IMF’s end-of-mission statement, Pakistan’s program implementation “remains strong and broadly aligned with the authorities’ commitments.”
The IMF team has appreciated progress in fiscal consolidation, monetary discipline, and structural reforms.
It has also noted the need to sustain momentum in restoring the energy sector’s viability and enhancing climate resilience.
The 37-month Extended Arrangement under the EFF, which IMF approved in mid-2023, is aimed at stabilizing Pakistan’s public finances, bolster foreign exchange reserves, and promote sustainable growth amid years of economic volatility.
The 28-month RSF has focused on climate-related resilience and sustainable infrastructure investments to help the country recover from recurring flood disasters and climate shocks.
In her statement, IMF Mission Chief Iva Petrova has admitted that discussions with Pakistani authorities had covered a broad range of policy priorities.
These included ensuring inflation stays within the State Bank of Pakistan’s target range. They also focused on advancing cost-reducing reforms in the energy sector, and accelerating privatization to reduce the government’s role in the economy.
“Significant progress was made in several areas, including sustaining fiscal consolidation to strengthen public finances while providing needed flood recovery support,” Petrova said adding that ensuring inflation remains durably within the SBP’s target range by maintaining an appropriately tight and data-dependent monetary policy.
They also discussed restoring the viability of the energy sector through regular tariff adjustments and cost-reducing reforms.
“And advancing structural reforms to strengthen governance and transparency,” Petrova said.
She added that productive talks were also held regarding Pakistan’s ongoing climate reform agenda, a key focus of the RSF.
It is expected to help the government finance projects aimed at flood resilience, water management, and green energy transition.
The IMF and Pakistani officials have also agreed to continue policy discussions in the coming weeks to resolve remaining technical issues before finalizing the SLA.
Once staff-level agreement is achieved, the IMF Executive Board will consider approval.
This will enable the release of the next tranche of funds to support Pakistan’s external financing needs.
