Pakistan is set for an important review with the International Monetary Fund (IMF) that will determine the release of the next $1.2 billion loan tranche. The discussions are expected to focus heavily on governance reforms, anti-corruption measures, and fiscal accountability. The IMF has emphasized that progress on these issues will be closely monitored, as they are considered essential to address systemic weaknesses that have long hindered economic stability in Pakistan.
The review will assess the implementation of the Governance and Corruption Diagnostic report as well as the National Fiscal Pact. These initiatives aim to improve accountability, reduce corruption, and ensure equitable fiscal management between the federal and provincial governments. Officials from both levels of government are expected to update the IMF on steps taken to strengthen oversight mechanisms, enhance transparency, and address issues such as tax evasion, procurement irregularities, and mismanagement in state-owned enterprises.
The IMF mission, led by Mission Chief Iva Petrova, is scheduled to visit Karachi on February 25 for consultations with the State Bank of Pakistan before moving to Islamabad for discussions with federal and provincial authorities. The talks, planned from March 2 to March 11, will cover critical issues including money laundering, anti-corruption measures, and fiscal reforms. The government has already developed a three-year implementation plan, and three dedicated committees, led by the Planning, Finance, and Law Ministers, have been established to oversee its execution. A technical unit within the Finance Ministry coordinates these reforms and ensures alignment across the committees.
The IMF will also review Pakistan’s progress in empowering provincial anti-corruption agencies to investigate and prosecute cases under the Anti-Money Laundering Act. Efforts to implement a centralized corruption risk assessment framework are underway, with the National Accountability Bureau tasked with evaluating vulnerabilities across institutions, including project management, procurement processes, and governance in state-owned enterprises. The IMF will also scrutinize the government’s work on streamlining public procurement to prevent abuse of the system, including measures requiring third-party evaluations for high-value contracts.
Fiscal reforms, including a tax simplification strategy, are also part of the IMF’s assessment. The government has committed to rationalizing tax schedules, reducing exemptions, and enhancing the capacity of the Tax Policy Office to provide independent advice and legislative support. Meanwhile, the backlog of economic dispute court cases will be addressed through a structured methodology that sets timelines, performance targets, and active monitoring mechanisms.
The government has engaged the United Kingdom’s Foreign, Commonwealth and Development Office to assist in implementing these reforms, reducing the need for a comprehensive IMF technical mission. Officials acknowledge that these reforms are complex, shaped not only by administrative and institutional factors but also by political and economic realities that influence incentives, sequencing, and feasibility.
