An IMF team will visit Pakistan on September 25, 2025, for the second review of the $7 billion Extended Fund Facility. The review will assess Pakistan’s economic performance for the March and June 2025 quarters. Pakistan is expected to meet all seven Quantitative Performance Criteria, including net international reserves and SWAP positions. A successful review will clear the way for a $1 billion tranche from the IMF Board. Pakistan has already received over $2 billion from previous installments.
Topline Securities reports that Pakistan’s primary fiscal balance for FY25 aligns with IMF targets. However, data on government guarantees remains undisclosed. The State Bank of Pakistan Governor is ready to present its performance but has not confirmed if all targets related to the bank have been fully met. The review will also look ahead to targets for FY26. Discussions will factor in the impact of recent devastating floods across Punjab and Sindh.
Read more: Pakistan clears 51 IMF conditions ahead of mission visit
The floods have killed 972 people and destroyed crops, livestock, and homes. These damages are expected to push food inflation higher and strain Pakistan’s finances further. Due to these challenges, the government is considering revising key economic projections. GDP growth may be lowered to 3 percent from 4 percent. Inflation targets might be raised to 8 percent, while tax revenue targets could be adjusted downward from Rs 14.13 trillion to between Rs 13.7 and 13.9 trillion.
The IMF’s Resident Representative emphasized the review’s importance in assessing Pakistan’s ability to respond financially to the disaster. Topline Securities suggests that Pakistan and the IMF will likely agree on revised economic forecasts. These revisions are expected to include higher fiscal deficit and inflation targets, alongside adjustments to GDP growth and tax revenue estimates.
Read more: IMF team to visit Pakistan for $1 billion tranche
This IMF review will be critical in guiding Pakistan’s financial path amid the fallout from the floods. Meeting the performance criteria could unlock vital funds to support economic stability and disaster recovery. Both Pakistan and the IMF appear prepared to adapt expectations given current challenges, underscoring the importance of flexibility in such programs.