Pakistan and the International Monetary Fund have yet to reach a staff-level agreement on the latest review of the country’s bailout program, with discussions set to continue in the coming days.
Officials said the scheduled talks ended without a final deal, mainly due to rising uncertainty linked to the evolving geopolitical situation, which has made economic projections for the remaining months of the current fiscal year more difficult.
An IMF mission led by Iva Petrova held meetings with Pakistani authorities as part of the third review of the 37-month Extended Fund Facility and the second review of the Resilience and Sustainability Facility.
The discussions took place in Karachi and Islamabad as well as through virtual meetings between February 25 and March 11, 2026.
According to the IMF, significant progress was made during the negotiations. However, more time is needed to assess how recent global developments could affect Pakistan’s economic outlook and the ongoing reform program.
Petrova said the program’s implementation remained broadly aligned with Pakistan’s commitments through the end of February 2026. The talks focused on maintaining fiscal discipline to strengthen public finances, keeping monetary policy tight to control inflation within the target range of the State Bank of Pakistan, and advancing reforms in the energy sector.
The discussions also emphasized structural reforms aimed at supporting economic growth while strengthening social protection and increasing spending on health and education.
The IMF also reviewed Pakistan’s progress under the climate-focused RSF framework, which is designed to improve the country’s resilience to environmental and climate-related risks.
Officials also assessed the potential economic impact of the ongoing conflict in the Middle East, particularly its effect on Pakistan’s balance of payments and external financing needs. Rising global oil prices and financial market volatility have added new uncertainty to the country’s economic outlook.
People familiar with the talks said the volatile environment has made it difficult to accurately forecast key indicators such as the oil import bill. Estimates for the current account balance, trade position, and fiscal outlook remain uncertain.
There are also concerns that prolonged tensions in the region could disrupt shipping through the Strait of Hormuz, which handles a large share of global energy shipments and plays a critical role in Pakistan’s energy imports.
The IMF said negotiations with Pakistani authorities will continue with the aim of reaching a staff-level agreement in the coming days.
