IMF says ‘significant progress’ made toward reaching staff-level agreement in talks with Pakistan

The International Monetary Fund (IMF) announced on Thursday that it had made “significant progress” toward reaching a staff-level agreement (SLA) in its ongoing discussions with Pakistani authorities.

An IMF team, led by Iva Petrova, visited Karachi and Islamabad from September 24 to October 8, 2025, to hold discussions on the second review under the Extended Fund Facility (EFF) and the first review under the Resilience and Sustainability Facility (RSF). 

At the conclusion of the discussions, Ms. Petrova issued the following statement:

“The IMF mission and the Pakistani authorities made significant progress toward reaching a Staff Level Agreement (SLA) on the second review under the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and on the first review of 28-month Arrangement under the Resilience and Sustainability Facility (RSF).

“Program implementation remains strong, and broadly aligned with the authorities’ commitments. Significant progress was made in the discussions in several areas, including sustaining fiscal consolidation to strengthen the public finances while providing needed flood recovery support; ensuring inflation remains durably within the SBP’s target range by maintaining an appropriately tight and data-dependent monetary policy; restoring the viability of the energy sector by implementing regular tariff adjustments and cost-reducing reforms; and advancing structural reforms to reduce the footprint of the state, strengthen governance and  transparency, foster a more competitive business environment, and liberalize commodity markets. Productive discussions were also held on the authorities’ reform agenda to strengthen climate resilience, including the completion of reform measures under the RSF.

“The IMF team and the authorities will continue policy discussions with a view to settling any outstanding issues.”

“The IMF team wants to express its sympathy to those affected by the recent floods, and is grateful to the Pakistani authorities, private sector, and development partners for many fruitful discussions and their hospitality throughout this mission,” the statement concluded. 

The IMF loan, approved in July 2024, aims to stabilize Pakistan’s macroeconomic situation and promote inclusive growth. 

Additionally, Pakistan received a $1 billion loan in May 2025 to help build resilience against climate-related challenges. However, this disbursement is contingent upon successful completion of reviews under the EFF.

The outcome of these talks will be pivotal for Pakistan’s economic future, with the IMF playing a crucial role in guiding the country toward long-term stability amidst ongoing challenges.