WASHINGTON: The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement on the second review of the 37-month Extended Fund Facility (EFF) and the first review of the 28-month Resilience and Sustainability Facility (RSF).
The agreement followed discussions between an IMF team led by Iva Petrova and Pakistani authorities from September 24 to October 8 in Karachi, Islamabad, and Washington, D.C. The agreement is subject to approval by the IMF Executive Board.
Once approved, Pakistan will receive about US$1.0 billion under the EFF and US$200 million under the RSF, bringing total disbursements under both programs to approximately US$3.3 billion.
According to the IMF, implementation of Pakistan’s economic program remains strong. The country has achieved a current account surplus for FY25—the first in 14 years—exceeded fiscal primary balance targets, contained inflation, strengthened external buffers, and seen improved financial conditions.
However, the recent floods, which affected nearly seven million people and caused significant damage to housing, infrastructure, and agricultural land, have lowered Pakistan’s GDP growth forecast for FY26 to between 3.25 and 3.5 percent. The IMF said the floods highlight Pakistan’s vulnerability to natural disasters and the need for continued climate resilience efforts.
Pakistani authorities have reaffirmed their commitment to both IMF programs. They plan to achieve the FY26 primary budget surplus target of 1.6 percent of GDP through stronger revenue collection and spending controls, while also reallocating funds for flood relief.
Social protection remains a priority, with efforts to expand the Benazir Income Support Program (BISP) and increase health and education spending to support vulnerable groups.
The government is also moving forward with structural reforms to improve tax policy, strengthen coordination between federal and provincial governments on revenue, and enhance public financial management.
The State Bank of Pakistan remains committed to a prudent, data-driven monetary policy aimed at keeping inflation within its 5–7 percent target range.
Energy sector reforms are also a focus, with steps to prevent the buildup of circular debt, improve the efficiency of power distribution companies, and advance privatization and market reforms. In addition, Pakistan is pushing ahead with policies to address climate risks, including measures related to green mobility, disaster financing, and energy transition.
The IMF expressed sympathy for those affected by the floods and thanked Pakistani authorities, the private sector, and development partners for their cooperation during the review mission.
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