Extended Arrangement under the Extended Fund Facility (EFF): A 36 month, SDR 4,393 million (425 percent of quota) Extended Arrangement under the EFF was approved by the Executive Board on September 4, 2013 and the seventh review was completed on June 26, 2015, for a total disbursement of SDR 2,880 million. The eighth tranche amounting to SDR 360 million will be available upon the completion of this review. Status of the program: Two end-June 2015 quantitative Performance Criteria (PCs) and three indicative targets (ITs) were missed, but deviations were either minor or temporary, corrective actions have been taken as needed, and the authorities remain on track to meet the end-September 2015 program targets. Specifically, while the program’s monetary PCs were met, the PCs on the fiscal deficit and government borrowing from the central bank were missed (linked to higher-than-programmed spending by some provinces along with a shortfall in federal revenue), and the IT on federal tax revenues was missed (reflecting legal challenges to some of the tax measures and the negative impact of lower global commodity prices). In both cases, the authorities are taking corrective measures. The IT on social cash transfers was missed by a small margin, but the targeted number of beneficiary households was achieved, making the deviation minor. The IT on power sector arrears was also missed, but this is expected to be temporary, reflecting a delay in the implementation of some elements of the arrears reduction plan. The end-September structural benchmark (SB) on improving the central bank’s interest corridor and the end-November SB to enact the Credit Bureau Bill were met ahead of time. Key issues: Discussions focused on: (i) end-June 2015 fiscal performance and the outlook for the fiscal year 2015/16; (ii) addressing arrears in the power sector; (iii) saving the windfall from falling oil prices to strengthen external buffers; (iv) progress on safeguarding financial stability; and (v) structural reforms in the energy sector, privatization, central bank independence, anti-money laundering framework, public debt management, trade, and business climate to unlock Pakistan’s long-term growth potential. Outreach activities included a press release and a joint press conference with the finance minister and central bank governor.