WASHINGTON: The International Monetary Fund (IMF) has reached a staff-level agreement with Pakistan on the third review of its Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF), potentially unlocking around $1.2 billion in fresh financing.
The agreement, announced after discussions held in Islamabad and Karachi and followed up virtually, remains subject to approval by the IMF Executive Board. Once cleared, Pakistan would gain access to about $1.0 billion under the EFF and approximately $210 million under the RSF, bringing total disbursements under the programmes to around $4.5 billion.
IMF Reaches Staff-Level Agreement on the Third Review for the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the Second Review for 28-month Arrangement Under the Resilience and Sustainability Facility (RSF) – Pakistan https://t.co/hYPsALIpbn
— Ministry of Finance, Government of Pakistan (@Financegovpk) March 28, 2026
The IMF said Pakistan’s programme implementation has remained broadly on track, with progress in stabilising the economy, containing inflation and strengthening external buffers. Economic activity has shown improvement following recovery in the previous fiscal year, while market confidence has also rebounded.
However, the Fund cautioned that external risks — particularly the ongoing conflict in the Middle East — could weigh on the outlook by driving energy price volatility, increasing inflationary pressures and impacting growth and the current account.
Reform Commitments
Pakistani authorities reaffirmed their commitment to maintaining prudent macroeconomic policies and advancing structural reforms. Key priorities include:
- Fiscal discipline: Targeting a primary surplus and reducing public debt through improved revenue collection and controlled spending
- Tax reforms: Expanding the tax base, strengthening audits and increasing digital monitoring
- Social protection: Enhancing support through programmes like the Benazir Income Support Programme (BISP)
- Monetary policy: Keeping inflation within target range with a data-driven approach
- Energy sector reforms: Ensuring cost recovery, reducing circular debt and improving efficiency
- Privatisation and governance: Advancing reforms in state-owned enterprises and reducing market distortions
Climate Focus
The IMF noted that Pakistan’s climate reform agenda, supported by the RSF, is progressing, with efforts aimed at improving resilience to climate-related risks. These include reforms in green mobility, climate finance management and disaster risk planning.
Outlook
While recent gains in macroeconomic stability are encouraging, the IMF stressed the need for continued reform momentum to sustain growth, protect vulnerable populations and guard against external shocks.
