ISLAMABAD: Pakistan has successfully met all seven quantitative performance criteria (QPCs) and five out of eight indicative targets (ITs) set under the IMF’s Extended Fund Facility (EFF) programme as of end-December, according to the International Monetary Fund (IMF).
The IMF’s latest report on the first review under the EFF highlights that Pakistan’s strong and timely implementation of the 37-month programme, approved in September 2024, is crucial to maintaining economic stability and fostering sustainable growth.
Financial and external conditions have improved, with a current account surplus reported in the first eight months of FY 2025 and reserves exceeding projections. Inflation has eased to historic lows, though core inflation remains elevated around 9 percent.
Economic recovery continues, albeit with slower growth in the first half of FY 2025 than initially expected.
Fiscal targets remain on track, particularly the primary surplus, but the IMF calls for further reforms to boost revenue mobilization, reduce debt, and create fiscal space for social and development spending. The Fund also stresses the importance of maintaining tight, data-driven monetary policy and a flexible exchange rate to support reserve rebuilding.
Energy sector reforms, including timely tariff adjustments, are urged to ensure cost recovery and reduce high sector costs. The IMF emphasizes the need for deeper structural reforms to improve governance, trade, and the investment climate to promote inclusive growth.
Looking ahead, the IMF proposes an arrangement under the Resilience and Sustainability Facility (RSF) with access to SDR 1 billion (49.2 percent of quota), aimed at enhancing Pakistan’s balance of payments resilience against climate risks. The RSF will support reforms to strengthen disaster resilience, improve water resource management, enhance intergovernmental coordination, and improve climate-related risk disclosure by banks and corporates, while supporting Pakistan’s climate mitigation commitments.
