Talks Begin Between Pakistan and IMF Over $7 Billion Bailout Plan

KARACHI: Pakistan and the International Monetary Fund (IMF) formally began talks on Tuesday for the first review of a $7 billion bailout program secured last year, according to an official statement from the finance ministry.

A nine-member IMF mission, led by Nathan Porter, arrived in Pakistan earlier this week to assess the country’s economic performance and determine the release of a $1.1 billion tranche expected within the next three weeks, a senior finance official confirmed to Arab News on condition of anonymity.

The review comes at a time when Pakistan’s macroeconomic indicators are showing cautious signs of recovery. Inflation has plummeted to its lowest level in over nine years, with the consumer price index (CPI) falling to 1.51 percent year-on-year in February. Meanwhile, the country’s current account has posted a surplus of $682 million for the period from July 2024 to January 2025, a stark contrast to the $1.8 billion deficit recorded during the same stretch last year.

Additionally, the Pakistan Stock Exchange (PSX) has enjoyed a bullish streak, with record gains reported throughout the past year — a signal of renewed investor confidence.

Photos released by the finance ministry showed Finance Minister Muhammad Aurangzeb leading the government team in high-level discussions with the IMF delegation, headed by mission chief Nathan Porter. “Pictures of kick-off meeting held today,” read the ministry’s caption on WhatsApp, accompanying the official images.

While no formal details of the negotiations have been made public yet, local media has extensively covered the IMF team’s visit.

Speaking to Reuters, Finance Minister Aurangzeb expressed optimism: “They are here. We will have two rounds of talks — first technical, then policy level. I think we are well-positioned.”

The IMF typically conducts a two-week review, examining fiscal performance, structural reforms, and compliance with agreed policy benchmarks.

In a parallel development, another IMF team visited Pakistan last week to explore the disbursement of approximately $1 billion in climate financing under the IMF’s Resilience and Sustainability Trust. Launched in 2022, the fund aims to support countries like Pakistan in tackling climate vulnerabilities and financing long-term green energy transitions.

The success of the ongoing review is crucial for Pakistan’s economic stability, as it continues to rebuild market confidence and sustain growth after narrowly avoiding default last year. All eyes are now on Islamabad and the IMF as they navigate this high-stakes phase of economic engagement.