ISLAMABAD (HRNW): The latest round of negotiations between Pakistan and the International Monetary Fund (IMF) has concluded without reaching a Staff-Level Agreement (SLA). Despite what officials described as Pakistan’s “excellent performance” during the talks, the agreement under the Extended Fund Facility (EFF) remains pending.
The discussions, led by IMF Mission Chief Eva Petrova, took place via virtual platforms and in-person meetings in Karachi and Islamabad from February 25 to March 11, 2026. The IMF mission noted that while Pakistan has remained broadly on track with its commitments—particularly in reducing the fiscal deficit and strengthening public finance—external shocks have complicated the completion of the review.
Key points from the official communiqué include:
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Geopolitical Impact: The IMF emphasized that escalating tensions in the Middle East are significantly impacting Pakistan’s economy, particularly affecting program targets due to rising global energy prices and supply chain disruptions.
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Monetary and Fiscal Policy: There was a strong emphasis on maintaining a tight monetary policy to control inflation. Discussions also covered the need for energy sector reforms and improving the efficiency of State-Owned Enterprises (SOEs).
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Climate and Social Protection: Pakistan received positive feedback for its performance regarding climate change goals. The country is currently participating in the 28-month Resilience and Sustainability (RS) program. Negotiations also touched upon increasing expenditures for social protection (BISP), health, and education.
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Ongoing Dialogue: Both parties agreed that economic consultations will continue over the coming days to address the gaps created by the volatile regional situation.
The IMF highlighted that sustainable economic stability for Pakistan will require continued adherence to structural reforms, especially in the face of heightened global uncertainty.
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