IMF Mission to Review Pakistan’s $8.1 Billion Loan Program in February 2026

Islamabad – An International Monetary Fund (IMF) mission, led by Iva Petrova, is scheduled to arrive in Pakistan on February 26th to review the nation’s implementation of its $7 billion Extended Fund Facility (EFF) and the $1.1 billion Resilience and Sustainability Facility (RSF). The nearly two-week visit, concluding on March 11th, will be particularly significant as both Pakistan and the IMF will discuss and outline the contours of the upcoming fiscal year 2026-27 budget, with a focus on provincial finances.

Program Performance and Key Areas of Review

As of the end of December 2025, Pakistan’s performance under the program has largely met expectations, despite a shortfall in revenue. Authorities believe a recent ruling by the Federal Constitutional Court regarding a “super tax” could help mitigate this shortfall. The power sector will be under close scrutiny due to recent policy fluctuations, including those related to industrial and residential fixed charges, although circular debt remains within target ranges.

Meeting Quantitative Targets

Pakistan has reportedly met almost all quantitative performance criteria for the end of December 2025. However, the country is lagging behind on indicative targets and structural benchmarks, which could impact the future implementation of the program. Topline Research anticipates Pakistan will meet nearly all seven quantitative performance criteria.

Did You Know? Pakistan has received financial assistance from the IMF twenty-five times since its independence.

While a floor on targeted cash transfers was missed in the previous review by Rs1bn, this was attributed to lower administrative expenses rather than reduced benefits to recipients. Net international reserves are projected to be around $6.7 billion, below the $7 billion benchmark for September 2025 and below $6 billion for December 2025, falling short of the $6.5 billion benchmark.

Potential Disbursements

Successful completion of the review could unlock approximately $1 billion (760 million Special Drawing Rights) under the EFF and an additional $200 million under the RSF by the end of April. The State Bank reports foreign currency swaps at $2.2 billion for September 2025 and $1.86 billion for December 2025, compared to targets of $2.25 billion and $2 billion, respectively. Primary surplus figures are estimated at Rs3.5 trillion and Rs4.1 trillion for September and December, respectively.

Expert Insight: The IMF review process highlights the delicate balance between Pakistan’s economic needs and the conditions attached to international financial assistance, particularly regarding fiscal discipline and structural reforms.

The Federal Board of Revenue’s indicative criteria were missed by Rs336 billion, but authorities hope the “super tax” verdict will partially offset this shortfall, though overall collection may still fall short of the annual target.

Frequently Asked Questions

What is the Extended Fund Facility (EFF)?

The EFF is a lending arrangement provided by the IMF to countries facing balance of payments difficulties, offering financial assistance to overcome short-term economic challenges.

What is the Resilience and Sustainability Facility (RSF)?

The RSF is a new IMF facility designed to help countries build economic resilience to climate vulnerabilities and natural disasters, with access of around $1.4 billion for Pakistan.

What happens if Pakistan does not meet the IMF’s requirements?

Failure to meet the IMF’s requirements could jeopardize future disbursements of funds under the EFF and RSF, potentially exacerbating Pakistan’s economic challenges.

As Pakistan prepares for these crucial discussions, the outcome will significantly shape its economic trajectory in the coming year.