Pakistan Economy Stabilises as IMF Praises Reforms
The International Monetary Fund (IMF) has welcomed Pakistan’s reform progress, stating that policy efforts under the IMF-supported programme have contributed to economic stabilisation and improved market confidence.
IMF Review Mission to Visit Pakistan February 25
IMF spokesperson and Director of Communications Julie Kozack said Pakistan is currently implementing an Extended Fund Facility (EFF) arrangement. An IMF staff mission is scheduled to visit Pakistan from February 25 to conduct discussions on the third review under the EFF and the second review under the Resilience and Sustainability Facility (RSF).
Kozack noted that Pakistan’s policy measures under the EFF have supported macroeconomic stability and gradually restored investor confidence. She highlighted that fiscal performance remains strong, with the country posting a primary fiscal surplus of 1.3 percent of gross domestic product in fiscal year 2025, in line with programme targets.
Fiscal Surplus, Inflation Control Boost IMF Confidence
She further stated that headline inflation has remained relatively contained, while Pakistan recorded its first current account surplus in 14 years during fiscal year 2025.
The Washington-based lender also confirmed the recent publication of the Governance and Corruption Diagnostic Report, which outlines reform proposals including simplification of tax policy design, ensuring a level playing field in public procurement, and enhancing transparency in asset declarations.
In December last year, the IMF Executive Board approved a $1.2 billion tranche for Pakistan following the completion of the second review under the EFF programme.
Ahead of the upcoming IMF mission, Pakistan has prepared a 15-point action plan in response to the Governance and Corruption Diagnostic (GCD) assessment. The plan includes identifying the top 10 high-risk federal agencies vulnerable to corruption and macro-critical exposures.
It also outlines measures to address the backlog of economic disputes. In the first year, authorities will develop and publish a methodology to assess the performance of courts and judges. In the second year, the government will issue the first performance report covering all administrative tribunals and special courts handling economic and commercial cases.
A detailed 240-page action plan prepared by the Government of Pakistan aims to strengthen institutional capacity to combat corruption and improve governance. Based on the diagnostic findings, comprehensive performance assessment criteria and a framework for evaluating court governance, including Alternative Dispute Resolution (ADR) mechanisms, will be developed to enable active case management.
The government will also conduct a legislative review of the Anti-Money Laundering Act (AMLA), 2010. A Joint Working Group under the AML/CFT Authority will examine ambiguities, particularly regarding whether a predicate offence conviction is required to prosecute money laundering cases. The review will also address definitional clarity, procedural processes, and investigative powers to strengthen money laundering investigations and prosecutions. Proposed amendments will be presented to Parliament and implemented by June 2027.
