Islamabad: Pakistan and the International Monetary Fund (IMF) have agreed on a schedule for the second economic review under the ongoing financial support program, a crucial step for the country’s struggling economy. According to official sources, the IMF delegation will visit Pakistan from September 25 to October 8, 2025, for a two-phase review process involving technical consultations and high-level policy negotiations.
Two-Phase Talks: Technical and Policy Discussions
The upcoming review will be conducted in two distinct stages. The first phase will involve technical-level discussions, where IMF experts will evaluate Pakistan’s compliance with previously agreed reforms and macroeconomic indicators, including fiscal discipline, inflation control, and revenue collection targets.
The second phase will focus on policy-level talks with senior government officials. These discussions will determine whether Pakistan’s economic reforms are on track and whether the IMF will approve the next tranche of funding.
Ministries and Institutions to Engage with IMF
Sources confirm that the IMF delegation will hold extensive meetings with multiple key institutions, including:
- Ministry of Finance – for fiscal policy and budgetary targets.
- Ministry of Energy – for reforms in power tariffs and circular debt management.
- Ministry of Planning – to assess development priorities and public sector investments.
- State Bank of Pakistan (SBP) – on monetary policy, inflation control, and exchange rate stability.
- Federal Board of Revenue (FBR) – on tax reforms and revenue collection.
- Oil and Gas Regulatory Authority (OGRA) & NEPRA – on pricing reforms in the energy sector.
The delegation will also hold discussions with provincial governments of Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan to review regional fiscal policies and expenditure frameworks.
Climate Financing Agreement
A critical component of this review is Pakistan’s access to funds under the climate financing agreement. Sources in the Finance Ministry revealed that Pakistan is set to receive $1.3 billion over 28 months under this arrangement. This facility aims to help the country cope with climate-related challenges such as floods, droughts, and energy transition demands.
This climate financing will also be tied to reforms in renewable energy policies, water management, and disaster resilience infrastructure.
Economic Context and Challenges
Pakistan is currently navigating through one of its toughest economic phases in recent history. Despite some stabilization in the currency and reduction in the current account deficit, the country continues to face:
- High inflation, driven by energy prices and food shortages.
- Slow growth, as industrial output and investment remain under pressure.
- High debt servicing costs, which consume a major portion of government revenues.
- Energy sector inefficiencies, including circular debt surpassing PKR 3.1 trillion.
The IMF review will closely monitor how Pakistan is managing these challenges, particularly its ability to enhance domestic revenue collection and reduce dependence on external borrowing.
Significance of the Review
Approval from this second economic review is essential for unlocking the next tranche of IMF funds, which will support Pakistan’s foreign exchange reserves and stabilize investor confidence. Failure to meet IMF conditions, however, could delay disbursements and create further pressure on the rupee and inflation levels.
Economic experts suggest that the government will have to demonstrate strong commitment toward structural reforms, including broadening the tax base, privatization of loss-making state-owned enterprises, and reforms in the power and gas sectors.
Provincial Consultations – A New Focus
Unlike past reviews, this round will also emphasize provincial consultations. The IMF is increasingly pushing for greater fiscal responsibility at the provincial level, as provinces account for a significant share of expenditure in health, education, and infrastructure. Aligning federal and provincial budgets with IMF benchmarks is seen as a key priority.
Looking Ahead
With the IMF delegation expected later this month, all eyes will be on whether Pakistan can assure its lenders of continued commitment to tough reforms while balancing public pressure from rising costs of living.
If successful, the review will not only unlock much-needed funds but also boost confidence in Pakistan’s ability to manage its long-term economic challenges. However, experts caution that without deeper reforms, the IMF’s support will only serve as a temporary lifeline rather than a lasting solution.
