The federal government has directed all provinces to urgently report progress on pending International Monetary Fund (IMF) targets within 24 hours, after delays threatened Pakistan’s second review under the $7 billion Extended Fund Facility (EFF) and the $1.4 billion Resilience and Sustainability Facility (RSF).
According to reports, the Prime Minister’s Office (PMO) contacted senior officials across provinces, instructing them to justify unmet goals and ensure alignment with IMF conditions. The Finance Ministry noted that Sindh and Punjab remain behind their fiscal targets, with Sindh showing a Rs40 billion deficit and Punjab objecting to stringent IMF conditions tied to flood aid and fiscal discipline.
The IMF has reportedly directed the suspension of disbursements for flood-related development projects until verified damage assessments are completed. The Fund emphasized that flood support cannot compromise provincial cash surplus obligations under the fiscal pact.
| Province | FY26 Cash Surplus Target (Rs Billion) | Status / Concern |
| Punjab | 740 | Lagging, citing tough IMF terms |
| Sindh | 370 | Budget deficit of Rs40bn |
| Khyber Pakhtunkhwa | 220 | Partial compliance |
| Balochistan | 185 | Awaiting confirmation |
The federal government reminded provinces to consult the Finance Ministry and IMF before adopting any new fiscal policies that could affect program commitments outlined in the Memorandum of Economic and Financial Policies (MEFP). Officials also indicated that Pakistan’s GDP growth forecast might be revised to 3.5%, while inflation could exceed 8% due to ongoing flood impacts.
“Support for flood recovery cannot undermine fiscal discipline,” an IMF representative reportedly stated, urging provinces to fulfill commitments under the national fiscal pact.