• Lender says Pakistan currently has primary fiscal surplus of 1.3pc of GDP ‘in line with programme targets’
• Notes that fiscal performance has been ‘strong’ and headline inflation ‘relatively contained’
• IMF team expected to visit Islamabad from 25th
ISLAMABAD: Policy efforts undertaken by Pakistan under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) “helped stabilise the economy and rebuild confidence,” the lending agency’s spokesperson said on Thursday during a weekly press briefing.
IMF Communications Director Julie Kozack further said that the country’s fiscal performance had been “strong”. She added that Pakistan currently had a primary fiscal surplus of 1.3 per cent of the gross domestic product (GDP), which was “in line with programme targets”.
“Headline inflation has been relatively contained. And Pakistan posted its first current account surplus in 14 years in FY25,” Ms Kozack added.
She also said that an IMF staff team was expected to visit Pakistan starting Feb 25 for discussions on the third review under the EFF and the second review under the Resilience and Sustainability Facility (RSF).
Ms Kozack also highlighted the IMF’s recent Governance and Corruption Diagnostic report, which she said “includes proposals for reforms, including simplifying tax policy design, levelling the playing field for public procurement, and improving the asset declaration transparency”.
The report highlighted persistent corruption challenges in Pakistan driven by systemic weaknesses across state institutions and demanded immediate initiation of a 15-point reform agenda to improve transparency, fairness and integrity.
Review
An IMF mission led by Iva Petrova is due to visit Pakistan later this month to review the implementation of the $7 billion EFF and the $1.1bn RSF facilities.
During the almost two-week visit ending March 11, the engagements would be of greater significance as both sides would also discuss budget proposals based on performance this year and set broad contours of the upcoming budget (for the fiscal year 2026-27), particularly those relating to provincial finances.
The programme’s performance as of December-end 2025 — the period for review — has mostly been up to the mark, albeit with a revenue shortfall, which authorities believe could be reduced following a recent super tax ruling by the Federal Constitutional Court that went in the government’s favour.
Different businesspersons, banks, and companies had challenged the imposition of the super tax in high courts, arguing against its retrospective imposition, saying it amounted to double taxation.
The power sector would also remain under added scrutiny given volatile policymaking in the recent months, including those relating to the industrial sector, residential fixed charges and so on, although circular debt numbers are within the target range.
On the positive side, Pakistan has met almost all quantitative performance criteria for December-end 2025. However, it is lagging behind in indicative targets and structural benchmarks, which could affect future programme implementation.
Upon the successful completion of the review, Pakistan will be eligible for the disbursement of about $1bn (760 million Special Drawing Rights) under the EFF and another $200m under the RSF by the end of April.
The EFF is a longer-term IMF loan programme designed to help countries address deep-seated economic weaknesses and medium-term balance-of-payments problems.
Published in Dawn, February 21st, 2026