MediumIV Macro Policy & Sovereign Debt10 September 2026, Thursday
IMF mission to arrive in Pakistan at the end of September for the fourth EFF review, with a tranche of about 1.2 billion dollars at stake
According to Dawn, the mission led by Iva Petrova will arrive on 23 September and stay for about two weeks. About 1 billion dollars under the EFF and 200 million dollars under the RSF are at stake.
According to a Dawn report of 10 September, the IMF mission will conduct the fourth review of the 7 billion dollar Extended Fund Facility (EFF) and the third review of the 1.4 billion dollar Resilience and Sustainability Facility (RSF) for the period ending 30 June 2026. If the review is successful, about 1 billion dollars (760 million SDR) from the EFF and 200 million dollars from the RSF will be released at the end of November or early December. Pakistan Times wrote that negotiations will begin on 22 September and be conducted alongside the first Article IV consultation in two years; the start date differs by one day between sources. According to Dawn, most fiscal targets were met, but there is a large revenue shortfall. Of the more than three dozen governance targets set for January–June, only a few were achieved.
The review comes at a time when Pakistan is grappling with inflation that has risen to 11.1% and an oil shock originating in the Gulf. According to official data cited by The Friday Times, the 25 loss-making state-owned enterprises had combined losses of 832.8 billion rupees in fiscal year 2025, and SOE debt stands at 9.571 trillion rupees. The Pakistani government submitted revised data to the IMF after correcting discrepancies of billions of dollars in import data. A delay to the tranche could damage market confidence, which had recovered on the back of a Eurobond issue and a Moody's upgrade. This would in turn raise the cost of new borrowing.
Talay assessment
Bottom line
Having met most fiscal targets puts Pakistan in a relatively strong position for the review; however, the large revenue shortfall, the failure to meet most governance targets and revisions to import data will complicate negotiations. In Pakistan's programmes, reviews are commonly completed, albeit with added conditions and delays. The most likely course is a staff-level agreement in exchange for state enterprise reform and revenue measures, with the roughly 1.2-billion-dollar tranche released in late November or early December.
Likely effects
- Pakistan external financingUncertainWeeks
A timely tranche release would preserve market confidence restored by the Eurobond issue and Moody's upgrade; a delay would raise new borrowing costs and put pressure on FX reserves.
- Pakistani households and fiscal measuresNegative1–6 months
New tax and energy price adjustments to close the revenue gap could add to the burden on households already facing 11.1% inflation and the Gulf-driven oil shock.
- State enterprise reformPositive6 months+
IMF pressure could speed up restructuring and privatisation at state-owned enterprises that lost 832.8 billion rupees, reducing the burden on the budget over time.
Possibilities, ranked
- 1Conditional staff-level agreement55%
At the end of the mission an agreement is reached with additional commitments on state enterprise reform and revenue measures; the tranche is released in late November or early December.
Watch: An IMF staff-level agreement announcement at the end of the mission and the IMF Executive Board schedule
- 2Delayed completion40%
Because of the revenue gap, governance targets and data inconsistencies the mission ends without agreement; a deal comes weeks or months later after additional measures.
Watch: The mission leaving without agreement and statements that virtual talks are continuing
- 3Programme goes off track5%
Due to the oil shock and revenue gap Pakistan deviates markedly from programme targets; the review stays suspended for an extended period and market confidence is shaken.
Watch: Announcement of a serious fiscal slippage, a sharp rise in Eurobond yields and an IMF statement on reassessing the programme
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.