ISLAMABAD: Pakistan is "well positioned" for the first review of its $7 billion International Monetary Fund (IMF) bailout programme, Finance Minister Muhammad Aurangzeb said on Tuesday, as talks with the global lender commenced. Islamabad secured the $7 billion Extended Fund Facility (EFF) last summer to help the country navigate through an economic crisis.

The programme has played a crucial role in stabilizing Pakistan's economy, and the government remains optimistic about achieving long-term recovery. "They are here. We will have two rounds of talks, first technical and then policy level," Aurangzeb told Reuters, expressing confidence in the country's economic standing ahead of the review.

The Ministry of Finance confirmed in a statement that Pakistani authorities, led by Aurangzeb, formally initiated discussions with the IMF delegation for the review. The Finance Division also shared two images from the meeting with the media via WhatsApp but did not provide further details. The images showed Pakistani officials, headed by Finance Minister Aurangzeb, in talks with an IMF delegation led by Pakistan mission chief Nathan Porter. The IMF mission began discussions with Pakistani authorities on Monday for the first review of the EFF programme. According to official sources within the Finance Ministry, the nine-member IMF delegation, led by Porter, met with the government's economic team, which was led by the Secretary of Finance.

The first phase of negotiations will focus on technical aspects, while the second phase will address policy-level concerns. Sources revealed that the upcoming federal budget for the fiscal year 2025-26, which is currently in the process of being formulated, will also be reviewed during the discussions. The IMF team will be in Pakistan for approximately two weeks to assess the country's economic performance from July to December 2024.

A successful review would unlock the next tranche of $1 billion, a crucial lifeline for Pakistan as it continues its economic stabilization efforts. The IMF delegation will hold meetings with various key government institutions, including the Ministry of Finance, Ministry of Energy, Planning Commission, State Bank of Pakistan (SBP), Federal Board of Revenue (FBR), Oil and Gas Regulatory Authority (OGRA), and National Electric Power Regulatory Authority (NEPRA).  In addition to federal-level discussions, the IMF team will also conduct separate talks with representatives from the provincial governments of Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan. The Pakistani government has consistently emphasized its commitment to fulfilling IMF conditions and implementing necessary economic reforms. Under the terms of the bailout programme, Pakistan has undertaken several measures, including tax reforms, energy sector adjustments, and efforts to enhance revenue generation.

These reforms aim to strengthen the country's economic foundation and ensure fiscal discipline. Economic experts believe that the IMF's endorsement following a successful review will help bolster investor confidence and provide much-needed financial stability to Pakistan. However, challenges remain, including inflationary pressures, high fiscal deficits, and structural economic issues that require long-term policy adjustments.

The government remains optimistic about meeting the IMF's benchmarks and securing the next tranche, which will support Pakistan's ongoing economic recovery. If the review is successful, it will not only unlock financial assistance but also enhance Pakistan's credibility in the global financial market. As the talks continue over the next two weeks, all eyes remain on Islamabad's ability to navigate this critical review successfully and secure further financial support to sustain its economic revival.