Talks with IMF conclude on USD7bn EFF fourth review

Pakistan and the International Monetary Fund have wrapped up talks that ran between September 23 and October 7, Business Recorder reported, citing official sources. The discussions covered the fourth review of the USD 7 billion Extended Fund Facility, the third review of the USD 1.4 billion Resilience and Sustainability Facility and an Article IV consultation. An IMF mission led by Iva Petrova examined fiscal consolidation, revenue, energy reforms and external financing.

Sources said the aim was to fix earlier programme slippages and firm up commitments for the rest of the arrangement. The Fund pressed Pakistan to tighten fiscal discipline, curb energy-sector circular debt and speed up a shift from broad subsidies to aid aimed at vulnerable households. Under one proposal, electricity relief for low-income users would shift from tariff-linked support to direct cash payments through the Benazir Income Support Programme. On revenue, the FBR annual target stayed at Rs15.264 trillion, even though collections beat the first-quarter goal.

Power-sector circular debt was about Rs1.675 trillion at end-June 2026, a breach of its target, and gas-sector circular debt was put near Rs3.6 trillion. Pakistan agreed to speed up targeted gas subsidies. The IMF also asked for a more realistic view of external financing needs, and the financing still needs Executive Board approval. Neither the IMF nor the Finance Ministry had published an official statement at the time of filing.