Formal negotiations between Pakistan and an International Monetary Fund (IMF) staff mission began on Monday for the fourth review of the $7 billion Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF).
The mission, led by Iva Petrova, is expected to remain in Pakistan for almost two weeks, with discussions continuing into the first week of October. The review will assess economic developments and progress on reforms under both IMF programmes.
Pakistan is currently implementing a 37-month EFF programme approved in September 2024. The programme focuses on macroeconomic stability, fiscal reforms, strengthening public finances, improving competitiveness and addressing structural weaknesses.
If the latest reviews are completed successfully and the required approvals follow, Pakistan is expected to become eligible for about $1 billion under the EFF and roughly $200 million under the RSF, bringing the potential combined disbursement to around $1.2 billion.
The latest talks follow the IMF Executive Board’s completion of Pakistan’s third EFF review and second RSF review in May. That decision released about $1.1 billion under the EFF and approximately $220 million under the RSF.
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Government clarifies PIA financing position
Separately, Adviser to the Finance Minister Khurram Schehzad said the government is not financing the purchase of new aircraft for Pakistan International Airlines (PIA), which was privatised last year.
Schehzad said the government had neither announced financing for PIA aircraft purchases nor provided a sovereign guarantee for taxpayer-funded loans. His comments followed reports and social media claims suggesting that the government was arranging sovereign-linked financing for the airline.
The clarification came after a meeting between Finance Minister Muhammad Aurangzeb and US Export-Import Bank Chairman John Jovanovic on the sidelines of the United Nations General Assembly session in New York.
According to the Finance Ministry, the discussions covered the Reko Diq mining project and potential financing opportunities for PIA aircraft. Reuters reported that the talks also covered possible US Exim financing for Boeing aircraft, refinery upgrades and Reko Diq.
Schehzad explained that US Exim’s role is to support US exports and jobs and that its established financing structures can support foreign purchasers of US-manufactured aircraft.
He said aircraft financing can be secured against the aircraft itself, with credit assessments based on the airline, lessee or any guarantor involved. A sovereign guarantee is therefore not automatically required, he added.
Schehzad also said the government’s discussions with US Exim extended beyond PIA and formed part of wider Pakistan-US economic engagement covering aviation, refinery upgrades and the Reko Diq project.
The IMF negotiations will remain a key focus for Pakistan as the government seeks to maintain progress under its current programme and secure the next round of financial support.
