IMF staff-level agreement clears path for $1.21bn in Pakistan funding
The International Monetary Fund has reached a staff-level agreement with Pakistan covering two programme reviews, a step that could unlock up to $1.21 billion in fresh financing for the country. The funds will not be released until the IMF Executive Board approves the deal, the Fund said.
According to the IMF, the agreement covers the fourth review of Pakistan's $7 billion Extended Fund Facility and the third review under the Resilience and Sustainability Facility. If approved, Pakistan would receive about $1 billion through the EFF and a further $210 million through the RSF, taking total disbursements under both programmes to about $5.7 billion.
An IMF team led by Iva Petrova held discussions with Pakistani officials in Karachi and Islamabad from 23 September to 7 October. The Fund said Pakistan had maintained economic stability despite higher energy prices and supply disruptions, and put growth at 4 percent during the first three quarters of fiscal year 2026, with full-year growth estimated at 3.6 percent.
The IMF urged Pakistan to meet its fiscal targets and press ahead with reforms, calling for stronger revenue collection, digital invoicing and risk-based tax audits, alongside improved public spending and procurement. It also pressed for timely energy tariff adjustments to prevent another buildup of circular debt, and backed a flexible exchange rate and continued accumulation of foreign exchange reserves.
Beyond the fiscal measures, the Fund said Pakistan must pursue wider structural reforms to support long-term growth, including reducing trade barriers, improving competition and advancing privatisation, as well as changes involving state-owned companies and anti-corruption institutions. It noted progress on climate-related reforms under the RSF. The IMF said risks remain from geopolitical tensions, energy prices and global financial conditions, and the final disbursement depends on the Executive Board's approval.
