FINANCE Minister Muhammad Aurangzeb is in Washington to participate in the IMF-World Bank plenary meeting and engage with American officials, multilateral organisations, financial institutions, rating agencies, as well as investors. However, the most challenging aspect of his visit involves salvaging the second review of Pakistan’s ongoing IMF programme, which concluded earlier this month without a staff-level agreement, delaying $1.2bn in pending loan disbursements. Even Pakistan’s embassy in Washington had emphasised this aspect in its statement prior to the minister’s arrival, saying the visit would focus on securing the third IMF tranche and meeting outstanding benchmarks under the extended programme and climate facility. The key issue preventing the agreement pertains to recent flood losses. The Fund insists that provinces not only bear flood damages from their own resources but also meet their cash surplus commitments to help the federal government attain its primary budget surplus target — the most critical condition of the IMF programme. Other contentious issues include missed deadlines for governance and corruption assessment report publication, and delays in declaration of assets of government officials in BPS-17 and above, and the upward revision of last year’s GDP numbers.

That said, not much progress seems to have been made on the IMF review during Mr Aurangzeb’s meeting with the Fund’s Middle East and Central Asia Director Jihad Azour. The official account of the meeting indicates that discussions did not go beyond Pakistan’s “reform agenda” and its commitment to “maintaining macroeconomic discipline” and “sustaining the current momentum of reforms.” The official statement suggests that the agreement is unlikely to be finalised during his visit, in spite of the minister’s optimism about concluding discussions on the review during his trip. The delays in reaching the SLA reflect not only the slow pace of reforms but, more critically, the government’s desire to secure concessions from the IMF. While Islamabad may eventually secure the agreement after more discussions and assurances, the repeated delays in finalising each review, despite the IMF staff’s positive assessments of Pakistan’s progress on programme targets, do not send a reassuring signal to the international community. This approach is doing little to help Pakistan regain the confidence of investors or bilateral lenders, as evidenced by the stagnation in both official and private inflows, which will be key to sustaining economic stability and kick-starting growth in the post-IMF years.

Published in Dawn, October 15th, 2025