Pakistan and the International Monetary Fund (IMF) have decided to continue their ongoing economic review talks virtually due to the prevailing security situation.
The IMF delegation left after holding initial meetings, and all remaining sessions will now take place online, according to sources in the Ministry of Finance.
Sources said that important meetings with the IMF delegation were scheduled from today as part of the second phase of the third economic review.
However, due to the current security environment, it was decided that the talks would continue virtually. Meetings will proceed as per schedule in the online format.
IMF Representative in Pakistan Mahir Benici spoke to Samaa TV about the ongoing discussions with Pakistani authorities. He said that negotiations with Pakistan will continue virtually. The IMF mission has formally begun talks with Pakistani officials in both Karachi and Islamabad.
According to Benisi, the IMF mission is being led by Eva Petrova. He explained that the negotiations are focused on the third review of Pakistan’s Extended Fund Facility (EFF) programme. In addition, discussions are also underway regarding the second review of the Resilience and Sustainability Facility (RSF).
He confirmed that these talks will also continue in a virtual format.
Second phase of third review in Islamabad
The second phase of the third economic review talks between Pakistan and the International Monetary Fund began in Islamabad on Monday morning. The IMF review mission, led by Mission Chief Eva Petrova, had held an inaugural meeting with Pakistan’s economic team at a private hotel in the capital.
Finance Minister Muhammad Aurangzeb briefed the delegation on recent economic improvements and expressed confidence that the country’s economy is moving in the right direction.
Improving economic indicators
During the initial meeting, the finance minister said inflation had declined to 5.2% in December 2025. He also noted that interest rates had fallen from 22% to 10.5%, while the current account deficit was limited to $1.17 billion. Foreign exchange reserves have crossed $16 billion, and production in large-scale industries has improved by 6%.
Aurangzeb added that progress had been made in the privatization program, including efforts related to Pakistan International Airlines (PIA).
He said that due to recent difficult decisions, the loan program remains on track and reforms in tax and energy sectors are underway.
Revenue shortfall, FBR briefing
According to sources, the Federal Board of Revenue (FBR) presented its first-half report for July to December 2025. The report showed tax revenue was Rs329 billion below the target during this period. However, officials noted that the tax-to-GDP ratio had improved.
The government team explained that the revenue decline was linked to a slowdown in economic activity and falling inflation.
IMF stresses revenue increase
Sources said the IMF appreciated the overall reform progress but emphasized the need for additional measures, particularly increasing revenue.
The mission is reviewing Pakistan’s request for the next $1.2 billion tranche under the ongoing loan program. Four to five separate meetings are scheduled between Pakistan and the IMF today under the virtual format.
The government team will present its priority plan, including budget targets and an assessment of the economic impact of recent floods.
The IMF will also review provincial tax revenues, especially agricultural income taxes.
A detailed briefing will be provided on external debt, financing arrangements, funding requirements and future repayment obligations.
Focus on economic stability
Officials say the shift to virtual meetings will not affect the review process. With the third economic review underway, both sides aim to ensure continued progress under the IMF program while navigating the current security challenges.
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