KARACHI: An International Monetary Fund (IMF) mission has arrived in Pakistan to hold the second review of its $7 billion External Fund Facility (EFF) and first review of the $1.4 billion Resilience and Sustainability Facility (RSF) loan programs for the country, an official of the global lender confirmed on Thursday.
The IMF approved a $7 billion bailout package for Pakistan under its EFF program in September last year. In May 2025, it approved a separate $1.4 billion loan to Pakistan under its climate resilience fund. The RSF will support Pakistan’s efforts in building economic resilience to climate vulnerabilities and natural disasters.
The mission arrives in Pakistan a day after Prime Minister Shehbaz Sharif met the fund’s Managing Director Kristalina Georgieva in New York on the sidelines of the ongoing United Nations’ General Assembly session. During the meeting on Wednesday, Sharif spoke about Pakistan’s progress in fulfilling the IMF program targets but also demanded that the impact of recent floods on Pakistan’s economy “must be factored into the IMF’s review.”
“[The IMF mission will] hold discussions on the second review under the Extended Fund Facility and the first review of the Resilience and Sustainability Facility,” Mahir Binici, the IMF’s resident representative to Pakistan, told Arab News.
Islamabad has so far received more than $2 billion under the EFF and is expecting a third tranche of $1 billion after the second review concludes successfully.
’A LITTLE BREATHER’
IMF bailout programs have been crucial for cash-strapped Pakistan to keep its fragile economy afloat. Islamabad has had to take painful decisions to secure bailouts from the IMF in the past, such as removing subsidies from food and fuel items.
The IMF’s review takes place as Pakistan reels from a deadly monsoon season, which has killed over 1,000 people since Jun. 26. Unusually heavy rains and excess water released by dams in India since late August caused the country’s breadbasket Punjab province to be hit by floods. At least 134 people were killed while more than 4.5 million people were affected as thousands of acres of farmland were inundated with floodwaters.
Pakistani financial analysts expect the IMF will grant some concessions to Pakistan by revising down its tax collection, fiscal balance and economic growth targets.
“We are expecting Pakistan to get a little breather due to the floods,” economist Sana Tawfik said.
The analyst said Pakistan would comfortably meet the international lender’s targets.
Shankar Talreja, head of research at brokerage firm Topline Securities Ltd., said the current review will focus on continuing the IMF’s reforms under revised parameters due to the floods. He said the government is expected to keep pushing for privatization of state-owned enterprises and clearing its old backlog of circular debt.
“The concessions are likely in form of some downward revisions in FBR (Federal Board of Revenue) tax revenue, upward revision in fiscal balance over relief spending and there might a downward adjustment in GDP growth target as well,” Talreja said.
Pakistan’s government has set its GDP growth target for this fiscal year at 4.2 percent.
JS Global Capital analyst Muhammad Waqas Ghani said he was “cautiously positive” about Pakistan’s prospects of completing the second review successfully.
“The IMF may still insist on additional reforms or stricter compliance on benchmarks, especially if they perceive backsliding,” Ghani said. “That could raise the political cost or put some stress on already fragile sectors.”
Ghani agreed with Talreja that the IMF may reduce Pakistan’s growth target.
“IMF will obviously examine how flexible the FY26 budget is to absorb emergency spending without derailing fiscal targets,” he noted, adding that damages due to floods were likely to reduce the lender’s growth estimates.
Tawfik, meanwhile, showed optimism that the lender might consider increasing its climate resilience fund for Pakistan.
“If they (IMF) can increase the amount ($1.4 billion) of the RSF facility, then maybe that will also be considered,” she said, adding that the decision would depend on the assessment Pakistan makes of the damages inflicted by the floods.
