IMF mission due on Sept 23 for biannual review of Pakistan’s economic performance

ISLAMABAD: An International Monetary Fund (IMF) mission is due to visit Pakistan on September 23 for a biannual review of the country’s economic performance and implementation of the $7 billion Extended Fund Facility (EFF) and the $1.4bn Resilience and Sustainability Facility (RSF) for the period ending June 30, 2026.

Official sources said that during an almost two-week visit ending in the first week of October, the IMF staff mission, led by Iva Petrova, would conduct the fourth review of the EFF and the third review of the RSF.

The mission would begin its visit with technical discussions at the State Bank of Pakistan, followed by meetings with the government’s sectoral teams, alongside a customary inaugural meeting with Finance Minister Muhammad Aurangzeb.

The engagement would also examine policy implementation at the start of the fiscal year, particularly the Federal Board of Revenue’s (FBR) ability and preparedness to meet its first-ever half-yearly revenue collection structural benchmark under an IMF programme, given the revenue machinery’s repeated large annual shortfalls.

This would also be the first review after the provincial governments surrendered more than Rs1.035 trillion of their National Finance Commission (NFC) shares to the Centre during the current fiscal year for national security and water resources, on top of the Rs1.8tr cash surplus separately committed under IMF pressure.

The programme’s performance against the fiscal targets as of end-June 2026 — the period under review — has mostly been on track, albeit with a major revenue shortfall and slippages in the policy matrix. These include the government’s intervention in commodity operations, particularly wheat and sugar, in violation of an IMF condition requiring the government to keep its hands off the commodities market.

Given the biannual reviews of the $7bn EFF and the $1.4bn RSF, the two sides will have to agree on past performance as well as forward-looking implementation plans.

Upon successful completion of the review, Pakistan will be eligible for the disbursement of about $1bn (760 million Special Drawing Rights) under the EFF and another $200m under the RSF by the end of November or early December.

Official reports suggest that while qualitative performance criteria on the fiscal and monetary sides were mostly on track, progress on economic governance reforms lagged far behind requirements. They suggested that only a couple of targets out of more than three dozen for improving economic governance during the January-June 2026 period had been met.

These targets were set by the prime minister after the IMF’s governance and corruption diagnostic assessment found serious shortcomings in efforts to combat corruption.

While the government had introduced reforms to ensure transparent procurement processes in state-owned entities (SOEs), direct contracting with SOEs without open competitive bidding continued unabated. There were also reports of agencies issuing tenders after projects had been completed through preferred contractors, compromising competitive pricing and transparency. The rules aimed at ending such preferential treatment have yet to be passed.