ISLAMABAD: The ongo­ing talks between an International Monetary Fund (IMF) staff mission and Pakistani authorities had to be converted to virtual mode after an opening round due to the regional situation following a joint attack by Israel and the United States on Iran.

The IMF mission, led by Iva Petrova, had to immediately relocate to Istanbul following an advisory issued by the money lending agency’s headquarters, disrupting a series of sectoral meetings planned for Monday. The remaining schedule of meetings, however, will remain intact and will progress through video link between Islamabad and Istanbul.

“An IMF mission led by Iva Petrova has started discussions with the authorities in Karachi and Islamabad on the third review of Pakistan’s Ext­ended Fund Facility (EFF) arrangement and the second review of the Resi­lience and Sustainability Facility (RSF). Discussions will continue to be held virtually,” the Fund said in a statement.

Earlier in the day, the two sides had a kick-off meeting presided over by Finance Minister Muhammad Aurangzeb. The two sides broadly touched upon the emerging regional security situation but were equally uncertain about how the crisis would play out and for how long.

The two sides would closely monitor evolving situation and discuss contingency measures as the engagements progress. The IMF mission had started discussions with the State Bank of Pakistan and the business community in Karachi on Feb 25.

The formal kick-off meeting took place on Monday, which will be followed by further technical engagements with relevant ministries and entities until this weekend. Meetings will then progress to policy-level talks early next week, with a final wrap-up meeting with the finance minister planned for March 11.

The discussions revolved around third review of the $7bn Extended Financing Facility (EFF) and 2nd review of $1.1bn Resilience & Sustainability Facility (RSF). The finance minister had last week said Pakistan was well positioned for the successful review.

The review talks are of greater significance as both sides have to review not only the programme performance for the half-year ending Dec 31, 2025, but also budget proposals based on performance this year and set broad contours of the upcoming budget (for the fiscal year 2026-27).

This would involve provincial reviews for now and future particularly those relating to provincial finances including agriculture income tax and governance-related challenges and action plan to address those weakness having trillions of rupees worth of economic losses. In this regard, procurement and accountability agencies would be under added scrutiny including their independence, institutional capacities, processes and performances.

The programme’s performance as of end December 2025 has mostly been up to the mark, albeit with a substantial revenue shortfall, which authorities believe could be reduced following a recent super tax decision of the federal court in government favour. However, overall tax to GDP ratio remains within limits. The two sides will also review all macroeconomic indicators for the ongoing third quarter.

Published in Dawn, March 3rd, 2026