Pakistan and the International Monetary Fund (IMF) failed to reach a staff-level agreement. The crucial negotiations covered the third review of the 37-month Extended Fund Facility (EFF) and the second review of the 28-month Resilience and Sustainability Facility (RSF). The two sides held virtual and in-person discussions in Karachi and Islamabad from February 25 to March 11, 2026. However, they could not finalize the deal.
Iva Petrova led the IMF mission. She confirmed that considerable progress occurred, but discussions will continue over the coming days. The teams need more time to fully assess the impact of recent global developments on Pakistan’s economy and the EFF-supported program. Furthermore, Pakistani authorities emphasized accelerating growth. Therefore, the IMF paid particular attention to deepening structural reforms.
Overall, program implementation under the EFF remained broadly aligned with commitments through the end of February 2026. The IMF heavily stressed sustaining fiscal consolidation to strengthen public finances. Additionally, the lender urged Pakistan to maintain a sufficiently tight monetary policy. This approach aims to keep inflation durably within the State Bank of Pakistan’s target range. The negotiations also targeted necessary energy sector reforms to improve viability.
Beyond strict financial metrics, the IMF discussed rebuilding health and education spending alongside efforts to strengthen social protection. Meanwhile, Pakistan made good progress on climate resilience. The authorities successfully completed reform measures under the RSF.
Finally, the negotiations reviewed severe external economic pressures. The IMF evaluated the Middle East war’s impact on Pakistan’s economic outlook, balance of payments, and external financing needs. Consequently, the global lender expressed deep concern over volatile, rising energy prices and tighter global financial conditions.
