An International Monetary Fund (IMF) mission, led by Iva Petrova, began meetings on Monday with Federal Minister for Finance and Revenue Muhammad Aurangzeb as part of the third review of Pakistan’s $7 billion Extended Fund Facility (EFF) and the second review of the $1.1 billion Resilience and Sustainability Facility (RSF). The discussions mark the start of the formal review process, with the IMF assessing Pakistan’s fiscal performance for the first half of the current financial year.
The agenda includes a detailed evaluation of the budget outlook for the ongoing fiscal year and the economic impact of recent floods. The government is expected to present its expenditure prioritisation plan, while officials will brief the IMF on shortfalls in tax collection, including sales tax and income tax performance.
The IMF team will also review Pakistan’s external debt and financing situation, including upcoming repayments and funding arrangements. During earlier discussions, the IMF sought assurances that a $2 billion deposit from the United Arab Emirates (UAE) would be rolled over for at least one year. Concerns were reportedly raised over the lack of confirmation on the rollover.
Officials from the State Bank of Pakistan assured the delegation that significant progress on the deposit rollover is expected, and highlighted that implementation of the external financing plan agreed with the IMF is already underway. Sources indicated a possible meeting between the IMF team and the UAE ambassador to secure progress, while the government remains engaged in further negotiations in case of a temporary rollover.