Pakistan and the International Monetary Fund have not reached a staff-level agreement within the scheduled timeframe on the latest review of the country’s bailout program, with negotiations set to continue in the coming days, officials said.
Sources said the evolving geopolitical situation has increased uncertainty around Pakistan’s economic outlook, particularly for fiscal and monetary projections for the remaining quarter of the current financial year and their implications for the next year.
An IMF mission led by Iva Petrova held discussions with Pakistani authorities on the third review of the 37-month Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF).
The talks were held in Karachi and Islamabad, as well as virtually, from February 25 to March 11, 2026.
The IMF said considerable progress was made during the discussions and talks will continue in the coming days to more fully assess the impact of recent global developments on Pakistan’s economy and the Extended Fund Facility (EFF)-supported program.
Petrova said the program’s implementation remained broadly aligned with Pakistan’s commitments through the end of February 2026. Discussions focused on sustaining fiscal consolidation to strengthen public finances, maintaining tight monetary policy to keep inflation within the target range of the State Bank of Pakistan, and advancing reforms to improve the viability of the country’s energy sector.
The talks also emphasized structural reforms aimed at accelerating economic growth while strengthening social protection and increasing spending on health and education.
“Particular attention was paid to deepening structural reforms, given the authorities’ emphasis on accelerating growth, alongside efforts to strengthen social protection and rebuild health and education spending. These discussions are ongoing”, Petrova said.
Separately, the IMF noted progress on reforms designed to enhance climate resilience under the RSF framework.
Officials also reviewed the potential economic impact of the ongoing conflict in the Middle East, particularly on Pakistan’s balance of payments and external financing needs, amid volatile and rising global energy prices and tighter financial conditions.
The IMF said discussions with Pakistani authorities will continue with the aim of reaching an agreement in the coming days.
According to people familiar with the discussions, the volatile environment has made key projections increasingly difficult. Pakistan’s oil import bill, for instance, cannot be estimated with precision amid rapidly shifting global energy prices and supply risks.
Officials also noted that the potential impact on export orders remains uncertain, especially if the Middle East crisis persists or leads to a prolonged disruption of shipping through the Strait of Hormuz, a critical global oil transit route.
As a result, projections for the country’s current account, trade balance and fiscal position remain fluid despite the availability of standard forecasting models, the sources said.
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