IMF Delegation Departs Amid Security Concerns; Talks to Continue Virtually

**Islamabad:** The **International Monetary Fund** (IMF) delegation left Pakistan after initial meetings due to the prevailing security situation, with both sides deciding to continue negotiations virtually.

According to sources in the Ministry of Finance, all remaining sessions of the ongoing third economic review will now be held online as per schedule. Officials said the shift to virtual talks was made in light of current security concerns, but the review process will proceed without delay.

The second phase of negotiations for the third biannual economic review had begun in Islamabad as Pakistan seeks to secure the next $1.2 billion tranche under the loan program. The IMF review mission, led by Mission Chief Eva Petrova, held an opening meeting with Finance Minister **Muhammad Aurangzeb** at a private hotel in the capital.

During the briefing, the finance minister expressed confidence in improving economic indicators, stating that difficult policy decisions have put the economy back on track and the IMF program remains on course. He informed the mission that inflation declined to 5.2 percent in December 2025, while the policy interest rate has dropped from 22 percent to 10.5 percent.

He added that progress has been made on the privatization program, including **Pakistan International Airlines** (PIA). Foreign exchange reserves have surpassed $16 billion, the current account deficit has been contained at $1.17 billion, and large-scale manufacturing has grown by 6 percent. Reforms in the tax and energy sectors are also ongoing.

Sources said the **Federal Board of Revenue** (FBR) presented its first-half report, showing a revenue shortfall of Rs329 billion from July to December compared to the target. However, the tax-to-GDP ratio improved. Officials attributed lower revenue to reduced inflation and slower economic activity. The IMF reportedly appreciated overall reform efforts but emphasized the need for additional measures to boost revenue.

Multiple meetings—four to five in total—are scheduled between Pakistan and the IMF. The government team will share a prioritized expenditure plan, review budget targets, assess the overall economic outlook, and discuss the economic impact of floods. The IMF is also expected to examine provincial tax collection, particularly agricultural income tax, along with external debt, financing arrangements, and future repayment obligations.