The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement that could unlock around $1.21 billion for the country under two ongoing financial programmes, subject to approval by the IMF Executive Board.
The agreement follows IMF discussions with Pakistani authorities held in Karachi and Islamabad from September 23 to October 7, 2026. The talks covered the fourth review of Pakistan’s 37-month Extended Fund Facility (EFF) and the third review of the 28-month Resilience and Sustainability Facility (RSF).
Under the agreement, Pakistan would receive approximately $1 billion through the EFF and another $210 million through the RSF. If approved by the IMF Executive Board, the latest financing would take combined disbursements under the two programmes to approximately $5.7 billion.
IMF Mission Chief Iva Petrova said Pakistan had maintained macroeconomic stability despite the impact of the Middle East conflict and other external pressures. She noted that strong policy implementation had helped the country navigate higher energy costs and supply disruptions.
Pakistan’s real GDP expanded by around 4 percent during the first three quarters of FY26, while full-year growth is estimated at 3.6 percent. Inflation, which peaked in May, eased to about 10.3 percent in September, according to the IMF, while core inflation remained relatively contained.
The IMF also highlighted improvements in Pakistan’s external position. The country’s current account was broadly balanced during FY26, supported by strong remittance inflows, while foreign exchange reserves climbed to approximately $21.5 billion by the end of September.
However, the Fund cautioned that Pakistan continues to face significant risks, including geopolitical tensions, fluctuations in energy prices, tighter global financial conditions and disruptions to international trade.
The IMF stressed the importance of maintaining fiscal discipline. It said implementation of Pakistan’s FY27 budget, including a targeted underlying primary surplus of 2 percent of GDP, would be important for reducing public debt over time.
The Fund also called for continued reforms in taxation, public financial management, social protection, monetary policy, the exchange-rate regime and the energy sector.
On social spending, the IMF noted that Pakistan had increased combined health and education spending from 2.2 percent of GDP in FY24 to 2.5 percent in FY26, with a further increase to 2.8 percent targeted for FY27.
The IMF also urged Pakistan to continue structural reforms aimed at improving competition, reducing regulatory and trade barriers, strengthening state-owned enterprises, advancing privatisation and improving governance.
Under the RSF, Pakistan is also pursuing measures to strengthen its resilience to climate-related risks, including reforms related to water management, energy efficiency, electricity subsidies and transport decarbonisation.
The latest agreement remains subject to approval by the IMF Executive Board, after which the proposed financing would become available to Pakistan.
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