Pakistan: The International Monetary Fund (IMF) has reached a staff-level agreement with Pakistan on the latest reviews of its economic programme, potentially unlocking $1.21 billion in financing subject to approval by the Fund’s Executive Board.
The agreement covers the fourth review of Pakistan’s $7 billion Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF). If approved, Pakistan would 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.
An IMF mission led by Iva Petrova held discussions with Pakistani authorities in Karachi and Islamabad from September 23 to October 7, including talks under the programme reviews and the IMF’s 2026 Article IV consultation.
What did the IMF say about Pakistan’s economy?
The IMF said Pakistan had maintained macroeconomic stability despite higher energy prices and supply disruptions linked to the Middle East conflict.
Real GDP growth reached 4% during the first three quarters of fiscal year 2026, while full-year growth was estimated at 3.6%. Headline inflation eased to around 10.3% in September, while foreign exchange reserves increased to approximately $21.5 billion by the end of the month.
The Fund said Pakistan’s current account remained broadly balanced, supported by strong remittances, but warned that geopolitical tensions, energy-price volatility, tighter global financial conditions and trade disruptions continued to pose risks.
What reforms has the IMF asked Pakistan to implement?
The IMF called for firm implementation of Pakistan’s FY27 budget and an underlying primary surplus target of 2% of GDP to support a reduction in public debt.
It also urged reforms in tax administration, including digital invoicing, risk-based audits and greater use of third-party data, alongside measures to simplify the tax system.
The Fund further called for timely energy tariff adjustments, measures to contain circular debt, stronger public financial management, improved public-sector efficiency and reduced debt rollover risks.
The IMF said structural reforms should also focus on competition, privatisation, state-owned enterprises, governance, anti-corruption measures, trade barriers and productivity.
The staff-level agreement is not yet the final disbursement approval. The proposed financing remains subject to consideration and approval by the IMF Executive Board.