IMF urges faster energy reforms as Pakistan flags easing debt pressure

Islamabad has signalled to the IMF that roughly $15bn of foreign funding is anticipated in the current fiscal year, set against external repayments near $21.5bn. According to Mettis Global, the lender also wants power-sector changes carried out more rapidly and circular debt kept within previously agreed targets.

The government said the $21.5bn total contains roughly $3.5bn of interest, and that $2.2bn had already been settled in July: $1.4bn owed on Chinese commercial loans plus $800mn on other debts. Islamabad anticipates lighter repayments over the remaining 11 months and a bill about $5bn below last year's $26.5bn. To shore up reserves, the government cited timely Saudi support, while the SBP has bought about $28bn from the interbank market over three years, including roughly $9bn in FY2025-26.

The IMF raised concerns about income tax targets for the agriculture sector, but the federal government argued that higher production costs have left many farmers unable to pay significant liabilities. Officials said provinces are taking steps to increase agricultural income tax and non-tax revenue collections, while the FBR updated the Fund on digital tax collection efforts. The two sides also plan a special session on automobile policy as part of the current talks.