Pakistan eyes $1.2bn inflow next month

The SLA was reached on March 28 on the successful third review of the Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF).

Finance Minister Muhammad Aurangzeb and his delegation held a series of meetings with IMF and World Bank officials in Washington this week during the Spring Meetings of the Bretton Woods institutions. The talks focused on Pakistan’s macroeconomic stabilisation, reform agenda, and external financing outlook.

Liquidity pressures to ease as IMF’s board meets in mid-May

An IMF mission arrived in Islamabad on Feb 25, before the start of the Middle East conflict. However, the team left and held virtual discussions that led to the SLA before the end of March. Another IMF mission is expected in Pakistan in May for pre-budget consultations, which are a regular feature of programme engagement.

Disbursements are made in phases following periodic reviews and approval by the IMF Executive Board. The EFF is expected to run through 2027, subject to the successful completion of the remaining reviews.

Officials said Pakistan has not yet taken a formal decision on whether to seek a new IMF arrangement once the current programme concludes, and consultations in this regard are ongoing.

The finance minister held a series of meetings with senior officials from the US, UK, Japan, multilateral development banks, and credit rating agencies.

In discussions with a senior US Treasury official, he reviewed Pakistan’s progress on macroeconomic stabilisation, external account management, and ongoing reforms aimed at improving investment climate and regulatory frameworks. Both sides also explored cooperation in energy, mineral development, and financial integrity systems.

In meetings with the Bill & Melinda Gates Foundation, Mr Aurangzeb reiterated Pakistan’s commitment to polio eradication and discussed ongoing reforms in tax administration, including digital compliance systems, AI-based monitoring tools, and expanded use of digital platforms to improve governance and service delivery. He also highlighted continued engagement on vaccine financing and coordination with development partners.

In talks with UK counterparts, he noted improvements in Pakistan’s external account position, ongoing fiscal consolidation, and policy measures to manage energy-sector pressures. He also highlighted climate-related spending, including recent flood-related relief financed through domestic resources, and the development of a more technology-driven disaster response system.

During talks with the Japan International Cooperation Agency (JICA), both sides discussed the gradual resumption of concessional lending, including early-stage infrastructure and water supply projects. Mr Aurangzeb emphasised the importance of reversing recent net negative disbursement trends and expanding cooperation in health, education, and blended financing.

In a meeting with the Asian Infrastructure Invest­ment Bank (AIIB), Pakistan highlighted its existing portfolio of about $1.7bn and a pipeline of additional projects. The minister also referred to planned Panda bond issuance and recent capital market activity as signs of improving investor sentiment, while stressing the need for stronger project execution and faster disbursement flows.

Meetings with S&P Global Ratings and Citibank focused on Pakistan’s recent IMF staff-level agreement, repayment of Eurobonds, and return to international capital markets. The Finance Minister outlined the country’s medium-term debt management strategy, including Eurobonds, sukuk instruments, and planned Panda bond issuance, and expressed optimism about improving credit outlook.

At a World Bank-hosted roundtable on digital social protection, Pakistan presented its digital public infrastructure initiatives, including the transformation of the Benazir Income Support Programme. The finance minister said digital systems had improved the efficiency of targeted subsidies and expanded financial inclusion, particularly among low-income households and women entering formal banking channels for the first time.

Officials described the overall engagements as part of Pakistan’s ongoing effort to strengthen economic stability, maintain reform momentum, and broaden engagement with international financial partners.