KARACHI: The International Monetary Fund has begun talks with Pakistan on reviews of its $7 billion economic program and separate $1.4 billion climate resilience facility, its resident representative told Arab News on Wednesday, potentially paving the way for further funding.

The fourth review of the main program and third review of the climate arrangement will assess Pakistan’s progress against commitments made to the lender. A successful review could make roughly $1 billion available under the economic program and $200 million under the climate facility but any release would require agreement with IMF staff followed by approval from the lender’s executive board. 

The talks come as Pakistan faces higher fuel costs linked to the war that began with US and Israeli strikes on Iran in February. Disruption to oil shipments from the Gulf has raised pressure on Pakistan’s import bill and domestic prices, adding to the challenges of keeping its economic recovery on track. 

“An IMF team led by Ms. Iva Petrova has started discussions with the Pakistani authorities on the review under the Extended Fund Facility and Resilience and Sustainability Facility, alongside the Article IV Consultation,” IMF resident representative Mahir Binici told Arab News.

The Article IV consultation is the IMF’s regular assessment of a member country’s economy. It is being conducted alongside the two loan reviews, which determine whether Pakistan has met the conditions for further disbursements.

Pakistan entered the 37-month economic program in September 2024 after years of pressure on its foreign exchange reserves and public finances. The arrangement supports efforts to raise tax revenue, improve the finances of the power sector and reform state-owned companies. 

The separate climate facility, approved in May 2025, supports changes to disaster planning, water management and the way climate risks are considered in public investment. It provides financing linked to those reforms, rather than a fund reserved solely for rebuilding after floods. 

The IMF last approved disbursements in May, releasing about $1.1 billion under the economic program and $220 million under the climate facility. 

It said Pakistan had received about $4.8 billion under the two arrangements by that point.