Pakistan, IMF reach staff-level agreement, unlocking $1.21bn
The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement on the fourth review of the $7 billion Extended Fund Facility (EFF) and the third review of the $1.4 billion Resilience and Sustainability Facility (RSF), potentially unlocking about $1.21 billion in financing for Islamabad.
The agreement, reached after talks from September 23 to October 7, is subject to approval by the IMF Executive Board.
If approved, Pakistan will receive about $1 billion under the EFF and $210 million under the RSF, taking total disbursements under the two programmes to around $5.7 billion.
The IMF team, led by Iva Petrova, also concluded the 2026 Article IV consultation during its meetings with Pakistani authorities in Karachi and Islamabad.
The fund said programme implementation under the EFF remained broadly on track despite a challenging external environment.
It said Pakistan had successfully navigated the impact of the Middle East conflict, while strong policies had helped preserve macroeconomic stability.
Real GDP growth reached 4% in the first three quarters of fiscal year 2025-26, while growth for the full fiscal year was estimated at 3.6% as higher energy prices and supply disruptions weakened momentum.
Headline inflation eased to about 10.3% in September after peaking in May, while core inflation remained contained.
The IMF said Pakistan remained committed to strengthening public finances, improving energy-sector viability, expanding social protection and accelerating reforms aimed at sustainable, private sector-led and inclusive growth.
Under the RSF, authorities have also continued work on climate reforms to strengthen resilience to climate-related risks.
The fund, however, warned that risks remained elevated due to geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions.
Pakistan remains reliant on external financing to bolster its foreign exchange reserves and meet debt repayment obligations.