IMF Begins Review of Pakistan's $7 Billion Loan Program Amid Mixed Performance Results

Islamabad:

An International Monetary Fund delegation officially commenced discussions with Pakistan's economic team to evaluate the implementation progress of a USD 7 billion loan package and a USD 1.1 billion Resilience and Sustainability Facility, as reported by media sources on Tuesday.

The review comes at a time when the program's performance through end-June 2025 - the period under assessment - has shown mixed results, according to the Dawn newspaper.

The IMF delegation, headed by Pakistan's Mission Chief Iva Petrova, convened on Monday with Pakistan's representatives led by Finance Minister Muhammad Aurangzeb.

Key economic officials attended the inaugural session, including the State Bank of Pakistan governor, the finance secretary, and the Federal Board of Revenue (FBR) chairman.

The IMF mission is scheduled to remain in Pakistan for approximately two weeks to conduct a comprehensive review of the USD 7 billion Extended Financing Facility (EFF) implementation and the USD 1.1 billion Resilience and Sustainability Facility (RSF).

Reports indicate that program performance has been inconsistent as of end-June 2025, and the beginning of the subsequent review period, concluding in December this year, has also fallen short of expectations, particularly regarding revenue collection targets.

Both parties must now negotiate corrective measures during their discussions to achieve the upcoming biannual targets.

While the power sector successfully met its benchmarks for the end-June 2025 period, revenue collection missed targets by approximately Rs 1.2 trillion - nearly 1 percent of GDP - during the previous fiscal year, with similar shortfalls observed in the first two months of the current fiscal year.

During their stay in Pakistan, the mission will also engage in forward-looking discussions with authorities to advocate for accelerated implementation of the end-December 2025 targets.

Pakistan is additionally raising concerns with the IMF regarding the delayed implementation of the brownfield petroleum refinery policy, which has hindered approximately USD 6 billion in fresh investment for refinery upgrades.

Officials maintain that this request aligns with the RSF's objectives, as the proposed upgrades would enable the production of petroleum products that meet European standards with minimal carbon and sulfur emissions.