Pakistan, IMF near staff-level deal as review talks move towards conclusion

Pakistan and the International Monetary Fund are reportedly close to a staff-level agreement once the current review discussions wrap up later this week, according to Profit by Pakistan Today. Such an accord could unlock roughly $1.2 billion from the $7 billion Extended Fund Facility and the $1.4 billion Resilience and Sustainability Facility. Work on the Memorandum of Economic and Fiscal Policies is being finalised, and the mission should wrap up within a couple of days.

Revenue targets are unchanged, and attention has moved to the half-year goal since first-quarter collections beat the agreed level. Energy remains central to the talks, including the winter LNG import plan and its effect on agreed current account goals. The government has pledged to cut cross-subsidies borne by industry and to contain gas-sector circular debt, which stands at Rs3.6 trillion.

Under a structural benchmark, Pakistan must shift from tariff-differential and cross-subsidies to a targeted subsidy model for low-income users routed through BISP by the close of January 2027. Subsidies for the poorest power consumers are expected to start from January following the revised base tariff. The government has committed to finishing the technical tie-up between power users and the National Socio-Economic Registry by the close of November. The IMF is also asking for more openness on the Inland Freight Equalisation Margin, which helps keep petroleum prices uniform across the country.