The International Monetary Fund (IMF) expects the next funding review for Pakistan in the second half of 2025 and said it would continue discussions with Pakistan authorities towards agreeing on the terms of the budget for the 2026 financial year, it said in a statement.
The IMF’s priority remains anchoring inflation within the central bank’s medium-term target range of 5–7%, the statement said, adding that the Pakistani authorities reaffirmed their commitment to fiscal consolidation while aiming for a primary surplus of 1.6% of GDP in FY2026.
In a related development, the IMF has confirmed that Pakistan met all the required targets under the ongoing Extended Fund Facility (EFF), leading to the successful completion of the programme’s first review and the disbursement of the agreed funding tranche.
IMF spokesperson Julie Kozack, speaking during a press briefing, said that Pakistan’s performance was reviewed by the Fund’s Executive Board, which determined that the country was on track and had made adequate progress on reforms.
Kozack clarified that all IMF disbursements under the EFF are credited directly to the State Bank of Pakistan and are not transferred to the federal government for budgetary expenditures. She underscored that the financing provided by the IMF is solely intended to resolve balance of payments problems and is subject to strict safeguards and conditionalities. These include requirements such as maintaining a zero ceiling on central bank lending to the government and specific targets for increasing foreign exchange reserves.
According to Kozack, these safeguards are standard for IMF programmes and are transparently laid out in the official programme documents.
Pakistan’s current EFF arrangement was approved in September 2024, replacing the nine-month Stand-by Arrangement that had concluded earlier that year. The $7 billion EFF programme was designed to provide medium-term support for Pakistan’s fragile external sector while pushing forward structural reforms.
Pakistan and IMF staff reached a staff-level agreement on March 25, 2025, which was subsequently approved by the Executive Board on May 9, 2025. Following this approval, the IMF approved the immediate disbursement of about $1 billion to Pakistan under the EFF and allowed an additional arrangement for the $1.4bn Resilience and Sustainability Facility (RSF).
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