The Pakistan IMF review mission has started work. A team led by Iva Petrova opened discussions on the fourth review of the $7 billion Extended Fund Facility and the third review of the $1.3 billion Resilience and Sustainability Facility, alongside the Article IV consultation.
What is at stake is about $1 billion under the EFF and $200 million under the RSF, released if the Executive Board approves a staff-level agreement. Pakistan has drawn $4.8 billion of the combined $8.3 billion so far — 57.8 percent. This tranche would take it to 72 percent.
The two arrangements
- EFF — $7 billion over 37 months, approved September 2024, now at its fourth review
- RSF — $1.3 billion over 28 months, staff-level agreement reached March 2025, now at its third review
IMF resident representative Mahir Banici confirmed the mission has begun. No end date has been announced, and the Fund does not publish the performance criteria being assessed until the staff report follows a staff-level agreement.
Which means the commitments under examination have to be assembled from what has surfaced elsewhere. Four are visible from this month’s reporting alone.
The refund ceiling nobody can verify
Pakistan agreed with the Fund to cap the FBR’s stock of outstanding tax refunds at Rs390 billion — disclosed to the Senate Standing Committee on Finance on 11 September.
The FBR disbursed about Rs197 billion in refunds over July and August, against Rs157 billion a year earlier, which is a real improvement. But the outstanding stock itself has not been published at any point. The ceiling is a quantitative commitment with no public monthly series against it, so nobody outside the mission can say whether it is being observed.
A structural deadline that has passed
Under its programme commitments, Pakistan was to have achieved full liberalisation of the sugar sector by June 2026.
What happened instead: on 19 August the Economic Coordination Committee approved the export of 108,000 tonnes of imported sugar, and on 9 September a steering committee chaired by the deputy prime minister approved a further 200,000 tonnes. That is the administered model functioning normally, releasing volumes tranche by tranche under ministerial chairmanship, three months past the date it was meant to be dismantled.
Whether the Fund treats that as a missed structural benchmark or accepts a revised timetable is the most concrete thing to watch in this review.
The levy the ministry is distancing itself from
Two days before the mission opened, the Finance Ministry publicly rejected the characterisation of the Petroleum Development Levy as the central element of the IMF programme, describing it as one revenue instrument among several.
The timing is not accidental. Taxes and duties account for roughly Rs114 a litre of petrol, and the government is simultaneously running a Rs75 billion fuel relief scheme that hands Rs100 a litre back to targeted users. A ministry clarifying that fuel taxation is not the programme’s centrepiece, on the eve of a review, is managing an argument it expects to have.
Power sector: the part that is going well
The energy file is where Pakistan arrives with something to show, and it deserves saying.
Ten expressions of interest have been received for a 51 to 100 percent stake in IESCO with management control — three of them from Turkish strategic operators. NEPRA has reset K-Electric’s base tariff to Rs32.37 a unit from a determined Rs39.97, cutting the government’s subsidy burden by about Rs200 billion across the FY2024 to FY2030 control period.
Distribution company privatisation and tariff discipline are long-standing Fund priorities, and both moved in September. Against that, the cost side deteriorated: only one of seven contracted LNG cargoes arrived in August, pushing the fuel cost adjustment to Rs1.73 a unit above the reference tariff.
The drawdown is running behind the clock
One comparison puts the reviews in context. The EFF was approved in September 2024 for 37 months, so roughly 24 months of its term have elapsed — about 65 percent. Pakistan has drawn 57.8 percent of the combined envelope.
Money is going out more slowly than time is passing. That gap of roughly seven percentage points is what review slippage looks like in the accounts: each disbursement waits on a staff-level agreement, and each agreement waits on conditions being met or waived.
It is not alarming on its own. Programmes routinely run behind schedule and the Fund rephases. But it does mean the remaining $3.5 billion has to clear a shrinking number of review windows, which strengthens the Fund’s hand at every one of them.
What a missed benchmark actually does
A missed structural benchmark rarely ends a programme. The usual outcomes are a waiver, a reset deadline, or a compensating measure elsewhere — and all three have precedent in Pakistan’s own programme history.
The cost is paid in a currency that does not appear in the tranche figure. Each waiver narrows the room for the next one, and each reset deadline makes the following commitment harder to negotiate. The sugar liberalisation date is the example to watch, because it is the one commitment this month where the deadline is unambiguous and the outcome is documented.
The external position has improved
Reserves are the strongest card. SBP holdings reached $21.389 billion in the week to 11 September, and remittances ran at $7.3 billion across July and August.
The qualification, made here when those figures landed, is that roughly 98 percent of that reserve jump was Eurobond proceeds. Borrowed reserves count in the headline and have to be repaid. A mission assessing external stability will read the composition, not just the level.
Oil is the live risk. Brent traded near $102 this week against the roughly $95 assumption underpinning the inflation path the State Bank used when it held rates at 11.5 percent. An import bill running above forecast is the fastest route to a missed external target, and it is the one variable nobody in Islamabad controls.
Related: The IMF Capped Pakistan’s Unpaid Tax Refunds at Rs390 Billion. One Company Has Waited Six Years.
