The International Monetary Fund has reached a staff-level agreement with Pakistan on the latest reviews of its lending programmes, clearing the way for about $1.21 billion in fresh financing. The deal, announced from the Fund's Washington headquarters on Wednesday, still requires approval from the IMF's Executive Board before any money is released.
The agreement covers the fourth review of Pakistan's 37-month Extended Fund Facility (EFF) and the third review of its 28-month Resilience and Sustainability Facility (RSF). If the board signs off, Islamabad would receive about $1 billion (SDR 760 million) under the EFF and about $210 million (SDR 154 million) under the RSF, taking total disbursements under the two arrangements to around $5.7 billion.
An IMF team led by mission chief Iva Petrova held talks with Pakistani officials in Karachi and Islamabad from September 23 to October 7, alongside the 2026 Article IV consultation. Pakistan's Finance Minister Muhammad Aurangzeb met Petrova for a wrap-up session at the conclusion of the review, the finance ministry said.
Growth and inflation picture
The Fund said Pakistan had preserved macroeconomic stability despite the impact of the Middle East conflict, with strong policies helping the economy weather higher energy prices and supply disruptions. Real GDP growth reached 4 percent in the first three quarters of FY26, though momentum weakened later in the year, leaving full-year growth estimated at 3.6 percent.
Headline inflation, which peaked in May, eased to about 10.3 percent in September, with core inflation remaining contained. The current account stayed broadly balanced, supported by strong remittances from Pakistanis abroad, while gross foreign exchange reserves rose to about $21.5 billion by the end of September.
Risks still elevated
Despite the progress, the IMF cautioned that risks remain high, citing geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions. The review also noted policy priorities including the FY27 budget's underlying primary surplus of 2 percent of GDP, health and education spending rising to 2.8 percent of GDP in FY27, energy sector viability, and climate-resilience reforms under the RSF.
The staff-level agreement marks a step forward in a programme Pakistan relies on to bolster reserves and meet debt repayments. The Fund's Executive Board is expected to take up the reviews in the coming weeks.
Sources: Reuters: IMF reaches staff deal with Pakistan, potentially unlocking $1.2 billion | 24 News HD: $1.2b clears key hurdle as Pakistan, IMF strike staff-level agreement (full IMF statement) | Gulf News: Pakistan secures $1.21 billion IMF deal following fourth loan review
The agreement covers the fourth review of Pakistan's 37-month Extended Fund Facility (EFF) and the third review of its 28-month Resilience and Sustainability Facility (RSF). If the board signs off, Islamabad would receive about $1 billion (SDR 760 million) under the EFF and about $210 million (SDR 154 million) under the RSF, taking total disbursements under the two arrangements to around $5.7 billion.
An IMF team led by mission chief Iva Petrova held talks with Pakistani officials in Karachi and Islamabad from September 23 to October 7, alongside the 2026 Article IV consultation. Pakistan's Finance Minister Muhammad Aurangzeb met Petrova for a wrap-up session at the conclusion of the review, the finance ministry said.
Growth and inflation picture
The Fund said Pakistan had preserved macroeconomic stability despite the impact of the Middle East conflict, with strong policies helping the economy weather higher energy prices and supply disruptions. Real GDP growth reached 4 percent in the first three quarters of FY26, though momentum weakened later in the year, leaving full-year growth estimated at 3.6 percent.
Headline inflation, which peaked in May, eased to about 10.3 percent in September, with core inflation remaining contained. The current account stayed broadly balanced, supported by strong remittances from Pakistanis abroad, while gross foreign exchange reserves rose to about $21.5 billion by the end of September.
Risks still elevated
Despite the progress, the IMF cautioned that risks remain high, citing geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions. The review also noted policy priorities including the FY27 budget's underlying primary surplus of 2 percent of GDP, health and education spending rising to 2.8 percent of GDP in FY27, energy sector viability, and climate-resilience reforms under the RSF.
The staff-level agreement marks a step forward in a programme Pakistan relies on to bolster reserves and meet debt repayments. The Fund's Executive Board is expected to take up the reviews in the coming weeks.
Sources: Reuters: IMF reaches staff deal with Pakistan, potentially unlocking $1.2 billion | 24 News HD: $1.2b clears key hurdle as Pakistan, IMF strike staff-level agreement (full IMF statement) | Gulf News: Pakistan secures $1.21 billion IMF deal following fourth loan review
