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Pakistan’s finance minister expects staff-level deal with IMF early next week

Finance Minister Muhammad Aurangzeb said the government hopes to finalise a staff-level agreement (SLA) with the International Monetary Fund (IMF) early next week during his visit to Washington with the State Bank of Pakistan (SBP) governor and finance secretary.

Addressing a delegation of Saudi investors at the Overseas Chamber of Commerce and Industry in Karachi, Aurangzeb siad that Pakistan has held “very constructive engagement” with the International Monetary Fund (IMF) mission and expressed confidence that the remaining issues are not “showstoppers.” 

“We have a few outstanding issues [with the IMF]; however, from my perspective, they are no showstoppers. We will continue these discussions virtually tonight and into the weekend. Hopefully, early next week, when the SBP governor, finance secretary, and I are in Washington, we hope to get moving with the SLA,” he said.

He added that he would leave for Washington tonight to attend the 2025 IMF and World Bank Annual Meetings, scheduled from October 13 to 18.

However, some reports suggest that the finalisation of staff-level agreement is contingent on reaching consensus on the external account, verified flood-related losses, and their fiscal adjustment across central and provincial accounts.

According to a report by Dawn, the IMF had shared the draft Memorandum of Economic and Financial Policies (MEFP) with Pakistani authorities before the conclusion of a two-week mission. 

“We were at the cusp of finalising the SLA, but two crucial tables in the MEFP required further adjustments,” an official said, noting that updated foreign remittance data had strengthened Pakistan’s position on the external account.

The State Bank of Pakistan (SBP) is expected to maintain a cautious monetary policy stance due to rebounding inflation. Flood-related losses remain to be finalised and verified, officials added. 

The IMF mission acknowledged the power division’s performance, particularly crediting Secretary Dr. Fakhre Alam Irfan for exceeding most indicators, but emphasized the need for timely corrective measures, including tariff adjustments, to ensure sustainability.

The government will have to ensure timely disbursement of committed subsidies, including pending bills in flood-affected districts where consumer bills were waived or relaxed. Provinces must meet their cash surplus targets after adjusting for flood losses. Development projects in affected regions are on hold, and the Federal Board of Revenue (FBR) plans to revise its revenue collection target downward, with measures to be implemented by January 1, 2026, to address potential shortfalls.

 


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