The IMF review Pakistan for the USD 7 billion Extended Fund Facility is expected this month. The programme began on 27 September 2024 and runs for 36 months. Exact dates are kept secret due to security concerns. Approval of last year’s budget was a prior condition for the review.
Critics argue the budget’s contractionary fiscal and monetary policies may hinder the economy from reaching the projected 4.2 percent GDP growth. The IMF had already lowered growth to 3.6 percent in April 2025. Recent floods could worsen the economic outlook, causing damage estimated at USD 40 billion.
The IMF is unlikely to insist on all harsh conditions due to flood devastation. Any relief measures, including subsidies, must get Fund approval. Otherwise, Pakistan risks suspension of the next tranche and foreign currency rollovers of over USD 12 billion.
Prime Minister Shehbaz Sharif announced a relief package, including waiving August electricity bills for flood-affected citizens. The government will channel relief through the Benazir Income Support Programme (BISP), following IMF guidance to target vulnerable populations efficiently. Unemployment remains high at 22 percent, highlighting the need for urgent economic support.
The IMF review Pakistan will shape the country’s economic response to floods and ongoing crises. Officials hope concessions will balance fiscal prudence with urgent relief. The outcome will affect the continuation of funding and Pakistan’s macroeconomic stability.