Pakistan eyes early staff-level deal with IMF as finance minister departs for Washington

Pakistan Finance Minister Muhammad Aurangzeb participates in a panel titled “Navigating an Uncertain World” during the 2025 annual IMF/World Bank Spring Meetings in Washington DC, US, April 25, 2025. (REUTERS/File)
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Updated 10 October 2025
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Pakistan eyes early staff-level deal with IMF as finance minister departs for Washington

  • The IMF this week said the two sides have made ‘significant progress’ on reviews of Pakistan $8.4 billion loan programs
  • The government is finalizing flood damage assessments and will prioritize the use of domestic resources, Aurangzeb says

ISLAMABAD: Pakistan is aiming to secure an early staff-level agreement with the International Monetary Fund (IMF) as Finance Minister Muhammad Aurangzeb is set to depart for Washington this week, seeking approval for reviews of the country’s $8.4 billion loans.

Pakistan secured a $7 billion, 37-month Extended Fund Facility in Sept. last year, followed by a $1.4 billion, 28-month Resilience and Sustainability Facility in May, to bankroll its economy.

The IMF this week said the two sides have made “significant progress” toward a staff-level agreement on reviews of the South Asian country’s $8.4 loans, the lender said late Wednesday.

Pakistan’s program implementation remained strong and broadly aligned with commitments, while progress was made in discussions on fiscal consolidation to strengthen public finances, according to the lender.

“The minister reaffirmed that talks with the IMF mission remain constructive, with only a few outstanding issues, and expressed optimism about reaching a staff-level agreement shortly during his upcoming meetings in Washington,” the Pakistani finance ministry said, following Aurangzeb’s virtual meeting with a Saudi business delegation.

On the domestic front, the minister said, the government is finalizing rapid damage assessments following recent floods and will prioritize the use of domestic resources for rescue and relief operations, before considering external assistance for rehabilitation and reconstruction.

Pakistan’s recent floods, triggered by heavy monsoon rains and India’s release of excess water, have killed more than 1,037 people and affected another over 4 million, besides damaging standing crops, homes and road network. The government has initially estimated the losses at Rs370 billion ($1.31 billion), though a detailed assessment has yet to be made.

This week, the World Bank projected Pakistan’s economy to grow by 2.6 percent in the ongoing fiscal year that began in July, lowering its earlier estimate due to the recent monsoon floods.

On Thursday, the IMF said its officials would continue policy discussions with Pakistani authorities with a view to settling any outstanding issues.

“The IMF team wants to express its sympathy to those affected by the recent floods, and is grateful to the Pakistani authorities, private sector, and development partners for many fruitful discussions,” the lender said as its mission completed its two-week visit to Pakistan.


Pakistan’s army chief to get expanded powers under proposed reform

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Pakistan’s army chief to get expanded powers under proposed reform

  • Asim Munir, President Trump’s ‘favorite field marshal,’ to be head of all military forces, a new position
  • Constitutional cases to be taken away from Supreme Court, opposition raps changes as undemocratic

ISLAMABAD: Pakistan’s powerful army chief will be given an expanded role and the remit of the Supreme Court will be curbed under constitutional changes passed by the upper house of parliament this week, a move the opposition says will undermine democracy.

Pakistan, historically coup-prone, is seeing its longest period of elected government. But in recent years, after civilians have sought to assert more authority in governance, the military has taken tighter hold of the levers of power, while not staging an outright takeover.

The bill, passed on Monday by the Senate in about three hours, unusually fast for a constitutional change, after the opposition boycotted the debate, is now before the lower house before it can become law.

Army chief Asim Munir, described by US President Donald Trump as his “favorite Field Marshal,” would take overall command of the military — including air and naval forces — with the new position of Chief of Defense Forces under the proposed amendment. After completion of his term, he would retain his rank and have legal immunity for life.

While the military has long wielded extensive power, the reforms would give it greater constitutional backing that would not be easily reversed. Hitherto the army chief was the equal of the air force and navy chiefs, with a chairman of the joint chiefs sitting above him, a post that would be eliminated.

Constitutional cases would no longer be heard by the Supreme Court but by a new Federal Constitutional Court, with judges appointed by the government. In recent years, the Supreme Court has, at times, blocked government policies and ousted prime ministers.

Critics say handpicked judges would now hear the most politically sensitive cases impacting the government, with the Supreme Court dealing with civil and criminal matters.

Under the reforms, President Asif Zardari would also get immunity for life from prosecution.

“All these amendments are for governance, and the federal government’s coordination with the provinces, and to strengthen defense capability after winning a war,” Information Minister Attaullah Tarar said, referring to clashes with India in May.

The government said it was confident it had the numbers in parliament to approve the constitutional changes, which were unusually introduced to the Senate over the weekend. A two-thirds majority is required in the two houses that make up the parliament, the Senate and National Assembly.

The biggest opposition party, founded by jailed ex-prime minister Imran Khan, said it was not consulted. After a noisy protest, opposition parties walked out on Monday when the amendment was introduced to the Senate floor for debate.

Khan’s party PTI condemned the proposed changes.

“The amendment serves as a tool for the ruling coalition to bulldoze institutional checks and balances, silence the opposition, restrict fundamental rights, and concentrate power in its own hands,” PTI’s spokesman for international media, Zulfi Bukhari, told Reuters.

Munir was promoted from General to Field Marshal after the May conflict with India. Law Minister Azam Tarar said on Saturday the rank would be given constitutional protection “because he is the hero of the whole nation.”

The military did not immediately respond to a request for comment. Security officials said the changing nature of modern war, where land troops do not necessarily play the paramount role, requires unified command of all the armed forces.

The government says the court reforms are necessary because hearing constitutional cases takes up too much of the Supreme Court’s time, creating a case backlog.