Pakistan and the International Monetary Fund have reached a staff-level agreement that will unlock about $1.2 billion in fresh funding, subject to approval by the IMF Executive Board.
The agreement comes under Pakistan’s ongoing $7 billion loan programme, providing critical financial support as the country continues efforts to stabilise its economy.
According to the IMF, Pakistan will gain access to around $1 billion under the Extended Fund Facility and about $210 million under the Resilience and Sustainability Facility. This will bring total disbursements under the programme to approximately $4.5 billion.
IMF Praises Economic Stability and Reforms
The IMF noted that Pakistan’s economic programme remains broadly on track and aligned with key reform objectives.
It highlighted improvements in inflation control, external account balance and strengthening foreign exchange reserves.
In its statement, the IMF said that ongoing policies have helped rebuild market confidence and support economic recovery. Economic activity has shown signs of momentum, particularly in the first half of the current fiscal year.
Focus on Fiscal Discipline and Structural Reforms
The agreement also emphasises the need for continued fiscal discipline and structural reforms. Pakistan has committed to strengthening public finances, improving the energy sector and expanding social protection programmes.
Authorities are also working to deepen reforms aimed at long-term growth and economic resilience. The IMF stressed the importance of maintaining a tight and data-driven monetary policy to keep inflation under control.
Climate Financing and Reform Agenda
A key component of the agreement includes support under the Resilience and Sustainability Facility, which focuses on climate-related reforms.
The IMF noted that Pakistan’s climate reform agenda is progressing and aims to reduce vulnerabilities linked to environmental risks. These reforms are seen as essential for long-term economic sustainability.
Risks Remain Amid Global Uncertainty
Despite progress, the IMF warned that external risks remain significant. The ongoing Middle East conflict has created uncertainty, with rising global energy prices posing a threat to inflation and economic stability.
Pakistan’s import-dependent economy remains vulnerable to such global shocks.
A Critical Step Forward
The staff-level agreement marks a key milestone in Pakistan’s engagement with the IMF. Once approved by the IMF Board, the tranche will provide much-needed financial relief and strengthen investor confidence.
However, continued reform efforts and prudent economic management will remain essential for sustaining stability.
