Staff-level agreement within reach as Pakistan, IMF advance talks

• Talks mainly focused on economic reforms and fiscal stability.
• 2 car import schemes nixed;  residence transfer rules tightened.
• 2nd $7bn EFF review, 1st $400m RSF tranche pending completion

Pakistan and the International Monetary Fund (IMF) have made significant progress toward a staff-level agreement on key economic reviews, the fund said on Thursday, following detailed discussions on fiscal reforms and financial stability measures.

An IMF team visited Karachi and Islamabad from September 24 to October 8, 2025, to hold discussions on the second review of the Extended Fund Facility (EFF) and the first review under the Resilience and Sustainability Facility. 

Officials said the talks focused on assessing Pakistan’s ongoing economic reforms and the steps needed to strengthen fiscal stability and sustainability.

Pakistan and the IMF were scheduled to conclude review talks on Wednesday for the completion of the second review under the $7 billion Extended Fund Facility (EFF) and the first tranche of $400 million under the Resilience and Sustainability Facility (RSF) of $1.4 billion.

The IMF has set a deadline for obtaining approval from the Economic Coordination Committee (ECC) of the Cabinet for the abolition of two schemes and the tightening of the third one within the current month.

On the tariff rationalisation plan, both sides agreed that the two schemes under the baggage rules and the gift scheme for importing cars would be abolished. For the third scheme, the Transfer of Residence, vehicles will only be imported from a country where the individual has stayed for at least one year, and misuse of this scheme will be curtailed.

One official commented that all vehicles, whether from Japan or the UK, are imported to Dubai first and then brought into Pakistan, so the misuse of imported cars must be curtailed.

Pakistan and the IMF are still working to evolve a consensus on the release of the GCD Assessment report, which remains a bone of contention between the two sides. According to insiders, the government established a task force to conduct a detailed review of the vague anti-corruption framework and shared it with the IMF. The task force recommended that the FBR notify draft rules about the “Declaration of Assets of Civil Servants serving in Basic Pay Scale 17-22 and their spouses.”

It also recommended making amendments in the Civil Servants Act, 1973, to allow for the publication of Assets and Liabilities of Civil Servants; making amendments in the Elections Act to mandate Non-Elected Advisors and Special Assistants to the Prime Minister to furnish their statement of assets and liabilities; and making necessary amendments in the NAB Ordinance and the FIA Act to ensure a clear mandate definition, prepare a joint offence list, and establish coordination mechanisms between the two agencies to work harmoniously on offences where both have jurisdiction.

Further recommendations include providing training on jurisdictional boundaries to officers of the NAB, FIA, and Provincial Anti-Corruption Establishments (ACEs); making arrangements for repatriating investigating officers of the FIA posted at airports for processing immigration and tasking that responsibility to another force; and investing in technology, capacity building, and training of the FIA, NAB, and provincial ACE investigators to bring them on par with their regional counterparts.

Additionally, the task force advised conducting awareness campaigns to instill a culture of integrity among officials and educate the public on their right to seek disclosure of public information under the Right to Information Act and on the regulatory framework for reporting corrupt practices; making provisions for the appointment of lawyers through open advertisement based on specific expertise to ensure quality prosecution and for the appointment of independent members of the legal fraternity in special courts on judicial assignments; and empowering Provincial Anti-Corruption Establishments to handle money laundering cases at the provincial level.

The recommendations also include establishing a central coordination forum for assistance in investigation, forensics, intelligence sharing, and addressing jurisdictional issues; ensuring that Chief Internal Auditors are appointed within Ministries and Divisions as required by the Public Finance Management Act; and ensuring strict compliance with the State-Owned Enterprises (Governance and Operations) Act, 2023, and that government entities are run in line with section 36 of the Public Finance Management Act, 2019.