An International Monetary Fund mission will arrive in Pakistan on September 23 to conduct a biannual review of the country’s economic performance under its $7 billion Extended Fund Facility and $1.4 billion Resilience and Sustainability Facility, marking the next major checkpoint in a lending programme that has become central to Pakistan’s fiscal management and, increasingly, to the political debate over how much relief the government can afford to give its own citizens.

The mission, led by Iva Petrova, is expected to stay for almost two weeks until the first week of October. It will conduct the fourth review of the EFF and the third review of the RSF, both covering the period ending June 30, 2026. According to official sources, the visit will begin with technical discussions at the State Bank of Pakistan, followed by meetings with government sectoral teams and a customary inaugural meeting with Finance Minister Muhammad Aurangzeb. The IMF’s Resident Representative to Pakistan, Mahir Banici, confirmed this week that the mission would also carry out Article IV consultations alongside the programme review, a broader annual health check the Fund conducts on member economies to assess overall macroeconomic policy, separate from the specific conditions attached to the lending arrangements themselves.

A key focus of the review will be the Federal Board of Revenue’s ability to meet its first half year revenue collection structural benchmark under the IMF programme, a target that carries particular weight given the government’s broader struggles to raise revenue without further burdening consumers already squeezed by inflation. That tension has become more visible in recent weeks amid mounting public pressure over petroleum levy collections, with Jamaat e Islami leading a weeks long protest campaign demanding the levy’s abolition and warning of an escalating agitation if the government does not respond. The IMF review and the domestic levy debate are, in effect, two sides of the same fiscal equation, since any concession on the levy would directly affect the revenue base the Fund is set to scrutinise later this month.

The programme’s performance against fiscal targets as of end June 2026 has mostly stayed on track, though officials note a major revenue shortfall alongside slippages in the policy matrix. These slippages include government intervention in commodity operations, particularly wheat and sugar, in violation of an IMF condition requiring the state to keep its hands off those markets. Such interventions, common in Pakistan’s agricultural economy as a way of stabilising prices for farmers or consumers, sit awkwardly within an IMF framework that generally pushes for reduced state involvement in commodity pricing and distribution, and are likely to feature in the technical discussions once the mission arrives.

The IMF will also assess progress on economic governance reforms tied to a broader anti corruption push that has run alongside the fiscal components of the programme. Official reports suggest only a few of more than three dozen targets set for the January to June 2026 period were actually achieved, a shortfall that could draw close attention from the visiting team. Those reforms followed an IMF governance and corruption diagnostic assessment that had identified significant weaknesses in Pakistan’s efforts to combat corruption across state institutions. While the government has introduced measures aimed at more transparent procurement by state owned enterprises, direct contracting with state entities without open competitive bidding has reportedly continued in practice, a gap between policy commitments and implementation that the mission is likely to press on during its visit, and one that has drawn criticism from opposition politicians who argue the government has been slow to follow through on its own reform pledges.

Pakistan’s ongoing arrangement with the Fund traces back to September 2024, when the IMF Executive Board approved the 37 month, roughly $7 billion EFF programme, a bailout aimed at stabilising the economy through fiscal discipline, structural reforms and measures intended to support longer term growth after a period of severe balance of payments pressure. The RSF arrangement followed after Pakistan formally inquired about it in October 2024, with a staff level agreement for a 28 month, $1.3 billion facility reached in March 2025 alongside the first EFF review. The RSF component is specifically designed to support climate resilience, helping fund reforms in areas such as green mobility, transport decarbonisation, water system resilience and disaster risk financing, distinguishing it from the more conventional fiscal and monetary conditions attached to the EFF.

Since the programme began, Pakistan has received about $4.8 billion combined under the two arrangements, disbursed in stages as successive reviews were completed. Earlier this year, the Executive Board completed the third review of the EFF and the second review of the RSF, releasing around $1.1 billion under the EFF and roughly $220 million under the RSF, and noting at the time that fiscal performance had been strong, with a primary surplus of 1.6 percent of GDP expected for the current fiscal year, broadly in line with programme targets. Gross reserves had also improved, standing at $16 billion at the end of last December compared with $14.5 billion a year earlier, with further rebuilding projected over the medium term even as inflation ticked upward on the back of higher global commodity prices feeding through into domestic energy costs.

If the fourth EFF review and third RSF review now underway are completed successfully, and the two sides reach a staff level agreement that is later approved by the IMF’s Executive Board, Pakistan would become eligible for a further disbursement of about $1 billion under the EFF and another $200 million under the RSF, with officials indicating the funds could land by the end of November or early December. That timeline mirrors the pattern of Pakistan’s previous reviews under the programme, where staff level agreements were typically followed by Executive Board approval and disbursement within roughly two to three months, giving the government a reasonably predictable, if closely watched, funding calendar to plan around.

The upcoming visit lands at a politically sensitive moment. It comes even as the government negotiates domestically with Jamaat e Islami over calls to abolish the petroleum levy, a demand that, if accepted in full, could complicate the very fiscal targets the IMF mission will be reviewing later this month. Officials have already indicated to JI representatives that scrapping the levy outright is difficult given Pakistan’s commitments under the Fund programme, a constraint that helps explain the government’s cautious, incremental approach to the ongoing negotiations even as street pressure builds. That tension is likely to shape how much room the government has to offer visible relief on fuel prices in the weeks ahead, particularly with petrol having crossed Rs370 per litre this week alone.

For a government trying to balance IMF conditions on one side and mounting public frustration over inflation and fuel costs on the other, the September 23 mission arrives as both a technical review and, in effect, a test of how much flexibility genuinely exists within the current arrangement, one whose outcome will likely shape not just Pakistan’s next disbursement but also the government’s negotiating position in its domestic standoff over the petroleum levy.

Compiled by the Weekly PK Business Desk.