Islamabad, March 4, 2025 – Pakistan and the International Monetary Fund (IMF) have commenced the first review of the $7 billion Extended Fund Facility (EFF) secured last year.
An IMF delegation, led by Nathan Porter, met with Finance Minister Muhammad Aurangzeb in Islamabad to discuss Pakistan’s economic situation and progress on fiscal reforms. The government assured the IMF of its commitment to economic stability and reform measures under the loan program.
During the meeting, Aurangzeb briefed the delegation on macroeconomic indicators, revenue collection, and structural reforms. Discussions covered Pakistan’s economic performance in the first half of the fiscal year, including the fiscal deficit, primary balance, and provincial surpluses. The IMF team also reviewed the Public Sector Development Programme (PSDP) expenditures and proposed budget adjustments.
Senior officials from the finance ministry, planning commission, and Federal Board of Revenue (FBR) participated in the talks, outlining tax collection efforts and spending strategies. The IMF delegation was also briefed on Pakistan’s Green Initiative, focusing on climate-related fiscal policies.
Pakistani authorities reaffirmed their commitment to taxation and energy sector reforms to ensure economic stability. Sources indicate that the IMF will present recommendations for Pakistan’s upcoming federal budget. Meanwhile, the finance ministry has submitted a compliance report on fiscal deficit control and external financing measures.
The IMF team will continue discussions with other ministries and financial institutions before concluding the review. The loan agreement remains vital for Pakistan as it seeks further disbursements to stabilize foreign exchange reserves and maintain investor confidence.
As part of the negotiations for the release of a $1 billion loan tranche, the IMF has urged Pakistan to crack down on tax evasion in the real estate sector. Authorities plan to penalize individuals declaring false property values, with fines ranging from Rs 200,000 to Rs 500,000 and possible imprisonment. Agents failing to register properties could face fines of up to Rs 500,000, while the Real Estate Regulatory Authority will have the power to impose prison sentences of up to three years.
The loan negotiations will continue until March 15, 2025, proceeding in two phases: technical discussions followed by policy-level talks.
