ISLAMABAD: The International Monetary Fund (IMF) on Thursday confirmed that its mission could not reach a staff-level agreement (SLA) with Pakistan on the third review of the country’s $7 billion Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF), although discussions made considerable progress.
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In its end-of-mission statement, the IMF said its team, led by Iva Petrova, held talks with Pakistani authorities from February 25 to March 11 in Karachi and Islamabad, as well as through virtual meetings.
IMF talks end without Staff Level Agreement!
Negotiations between Pakistan and the International Monetary Fund for the $1 billion loan tranche remained inconclusive on Wednesday due to differences over the viability of this year’s budget, which has been compromised by poor…
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“While considerable progress was made in the discussions, these will continue in the coming days, including to more fully assess the impact of recent global developments on Pakistan’s economy and the EFF-supported programme,” Petrova said.
The IMF noted that programme implementation under the EFF remained broadly aligned with the authorities’ commitments through the end of February. It added that progress had been made in discussions on future policy measures aimed at sustaining fiscal consolidation to strengthen public finances.
The talks also focused on maintaining a sufficiently tight monetary policy to ensure inflation remains within the target range of the State Bank of Pakistan. Reforms to improve the viability of the energy sector were also discussed as part of broader economic restructuring efforts.
According to the statement, particular attention was given to deepening structural reforms to support economic growth while strengthening social protection and increasing spending on health and education. The IMF also noted progress in Pakistan’s reform agenda aimed at strengthening climate resilience under the RSF arrangement.
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Officials additionally discussed the potential impact of the conflict in the Middle East on Pakistan’s economic outlook, particularly its balance of payments and external financing needs amid volatile energy prices and tightening global financial conditions. The IMF mission said it would continue discussions with Pakistani authorities in the coming days with a view to concluding the reviews.