IMF Chief Hails Pakistan’s Reform Progress as Shehbaz Vows to Stay the Course Ahead of Programme Review
By Uzair Saleem — SCN News
NEW YORK, Sept. 23 — International Monetary Fund Managing Director Kristalina Georgieva praised Pakistan’s implementation of economic reforms after meeting Prime Minister Shehbaz Sharif in New York, saying the programme had helped preserve stability, rebuild confidence and restore access to international markets as Islamabad prepares for another review of its IMF-supported programme. Shehbaz, meeting Georgieva on the sidelines of the 81st UN General Assembly, pledged that his government would “stay the course” on reforms despite regional conflict and external inflationary pressures.
The meeting placed Pakistan’s next phase of economic reforms firmly on the agenda during Shehbaz’s UNGA visit, with both sides discussing the forthcoming IMF programme review and the policies needed to move the economy beyond stabilisation toward sustained growth. Georgieva said strong implementation had helped Pakistan preserve economic stability, restore confidence and regain market access, while stressing that continued reforms would be needed to lift growth and improve living standards.
Shehbaz told the IMF chief that Pakistan was steadily transitioning from macroeconomic stabilisation toward economic recovery, supported by tighter fiscal management, stronger external buffers and improving investor confidence. He reaffirmed government ownership of the reform programme and highlighted the National Tariff Regime, increased domestic revenue mobilisation and progress on privatisation as areas where Islamabad intends to maintain momentum.
The prime minister also stressed that reforms would have to proceed alongside protection for vulnerable households, an important issue as fiscal consolidation, energy-sector restructuring and revenue measures continue to affect consumers. Pakistan’s IMF programme itself places stronger social protection alongside fiscal sustainability, energy-sector viability, state-owned enterprise reform and measures aimed at improving productivity and private-sector development.
The positive language from Georgieva is significant ahead of the next programme review because Pakistan remains dependent on maintaining IMF confidence while pursuing a difficult transition from economic stabilisation to stronger and more durable growth. The Fund’s Executive Board completed the third review of Pakistan’s 37-month Extended Fund Facility in May, unlocking about $1.1 billion under the EFF and another $220 million under the Resilience and Sustainability Facility. Total disbursements under the two arrangements had reached about $4.8 billion at that point.
The IMF said at the May review that Pakistan’s strong implementation had maintained economic stability and improved financing and external conditions despite shocks associated with the Middle East conflict. It also cautioned that maintaining stability would require continued strong macroeconomic policies and faster structural reforms rather than treating the improvement as the end of the adjustment process.
That distinction remains central to Pakistan’s economic outlook. Stabilisation has strengthened Islamabad’s position compared with the severe external financing pressures experienced earlier in the programme cycle, but the IMF continues to identify revenue mobilisation, energy-sector viability, state-owned enterprise reform, competition, productivity and governance as areas requiring sustained action. The Fund has also stressed the need to rebuild reserve buffers and preserve fiscal sustainability while expanding effective social protection.
Pakistan’s external position has shown improvement. The IMF said gross foreign-exchange reserves stood at $16 billion at the end of December 2025, up from $14.5 billion at the end of June that year, while the current account was broadly balanced during the first nine months of fiscal 2026. Economic growth had accelerated, although higher global commodity prices associated with the Middle East conflict were feeding into domestic energy prices.
Shehbaz presented those gains in New York as evidence that Pakistan was moving into a recovery phase rather than simply managing an immediate balance-of-payments crisis. His government’s challenge, however, is to convert macroeconomic stability into stronger investment, employment and household income without reversing fiscal gains that underpin the IMF programme.
Revenue mobilisation remains one of the most politically difficult components. The programme calls for broadening Pakistan’s tax base, improving compliance and reducing distortions, while stronger public finances are intended eventually to create greater room for social assistance, education, healthcare and productive investment. Progress in those areas will be important in determining whether stabilisation produces benefits that become more visible to households.
Privatisation and reform of state-owned enterprises form another major part of the agenda. The IMF wants Pakistan to reduce inefficiencies and the state’s footprint in commercial activity while improving public services and encouraging private-sector investment. Islamabad has repeatedly pledged progress on privatisation, but implementation across major state enterprises remains a politically and administratively difficult process.
Energy reform is similarly central because persistent inefficiencies and financial losses in the sector have repeatedly contributed to fiscal pressures. IMF-supported policies seek to improve the sector’s viability while Pakistan also pursues climate-related reforms under the Resilience and Sustainability Facility, including measures involving green transport, climate-risk management and resilience of water systems.
Georgieva’s message in New York therefore combined endorsement with a clear condition: Pakistan has made progress because reforms have been implemented, and maintaining that progress depends on continuing them. Her assessment that reforms had restored confidence and market access was accompanied by the warning that further implementation is necessary to generate stronger growth and improve living standards.
For Shehbaz, the meeting also provided an opportunity to demonstrate international confidence in Pakistan’s economic direction during one of the most visible diplomatic weeks of the year. Finance Minister Muhammad Aurangzeb, Deputy Prime Minister and Foreign Minister Ishaq Dar, Adviser on Privatisation Muhammad Ali and Special Assistant Tariq Fatemi were among the senior Pakistani officials attending the meeting, underscoring the economic importance Islamabad attached to the talks.
The forthcoming IMF review will provide a more rigorous test than the positive public language surrounding the UNGA meeting. Fund reviews assess performance against agreed programme commitments and structural measures, meaning praise for overall progress does not automatically guarantee that every outstanding policy issue has been resolved.
The meeting nevertheless produced a clear convergence in public messaging. Georgieva says strong reform implementation has helped Pakistan preserve stability, restore confidence and regain market access; Shehbaz says his government intends to maintain that reform path as it tries to turn stabilisation into sustainable economic recovery. The next IMF review will test how far that transition has progressed.