IMF, Pakistan fail to reach staff-level agreement, talks to continue

ISLAMABAD: The International Monetary Fund (IMF) on Thursday said that its mission could not reach a staff level agreement on the third review of Pakistan’s $7 billion Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF) despite considerable progress, and that negotiations would continue.

“While considerable progress was made in the discussions, these will continue in the coming days, including to more fully assess the impact of recent global developments on Pakistan’s economy and the EFF-supported (Extended Fund Facility) program,” IMF advisor Iva Petrova said in the statement.

According to the statement, virtual negotiations took place between 25 February and 11 March, led by IMF mission chief Eva Petrova, with meetings held in Karachi and Islamabad. The Fund noted that overall implementation of the programme has broadly remained in line with commitments.

The IMF added that Pakistan’s performance on climate-related targets has been encouraging.

Pakistan is also participating in the Fund’s 28-month Resilience and Sustainability (RS) programme, aimed at addressing climate challenges and strengthening economic resilience.

Discussions also covered measures to reduce Pakistan’s fiscal deficit, strengthen public finances and maintain a tight monetary policy to keep inflation under control.

Reforms in the energy sector and efforts to improve its efficiency were also reviewed, the IMF statement said.

The IMF said talks with Pakistan’s economic team also focused on increasing spending on social protection, health and education, while progress on reforms to tackle climate change was acknowledged.

The statement further noted that tensions in the Middle East and rising global energy prices are creating additional economic pressures for Pakistan and could affect programme targets. As a result, further rounds of negotiations between Pakistan and the IMF are expected in the coming days.