Pakistan is expected to secure the $1bn IMF tranche 2025 despite missing some revenue and fiscal targets. Technical-level talks with the International Monetary Fund (IMF) have concluded, and policy-level discussions will begin Monday. The disbursement of the tranche under the Extended Fund Facility (EFF) depends on a few waivers, with Finance Minister Muhammad Aurangzeb expected to wrap up the review by October 9–10.
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The IMF review highlighted Pakistan’s mixed performance. The power sector showed improved recovery and reduced circular debt, partly due to subsidy adjustments and fresh loans. However, the Federal Board of Revenue (FBR) and the provincial governments of Punjab and Sindh came under criticism for failing to meet revenue targets and cash surplus commitments. The FBR missed its end-June 2025 target by nearly Rs200 billion.
At the provincial level, Sindh announced a deficit budget, while Punjab failed to deliver its required surplus. The IMF has pushed for corrective measures, but flood-related expenses are expected to hinder provincial fiscal performance. Punjab is tasked with generating a Rs740 billion surplus, followed by Sindh with Rs370 billion. Agricultural tax implementation, a major IMF condition, remains uncertain due to flood damage in Punjab and Sindh.
Talks also covered the rising gas sector circular debt, compliance with state-owned enterprise laws, and refinery upgrades. The IMF opposed tax breaks for outdated refineries, arguing that incentives would harm the $1.4bn Resilience and Sustainability Facility (RSF) for climate change. This stance risks $6bn in fresh investment that Pakistan’s petroleum sector had been negotiating.
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Overall, Pakistan has met most quantitative IMF targets but lags on structural reforms. Despite these challenges, the favorable global political climate and IMF’s expected flexibility on flood-related slippages make the Pakistan IMF tranche 2025 release likely by early nexT.