Pakistan has reached a staff-level agreement with the International Monetary Fund on the third review of its Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF). Once approved by the IMF Executive Board, the country will receive about US$1.0 billion under the EFF and US$210 million under the RSF, taking total disbursements under both programs to roughly US$4.5 billion.
The IMF highlighted that Pakistan’s ongoing policies under the EFF have strengthened the economy and restored market confidence, with economic activity gaining momentum after the FY25 recovery. Inflation and the current account remained manageable, and external buffers continued to strengthen. However, the conflict in the Middle East poses risks of higher inflation and slower growth due to volatile energy prices and global financial pressures.
Authorities have reaffirmed their commitment to sound fiscal and monetary policies, including meeting FY26 budget targets, deepening tax reforms, ensuring social protection through programs like the Benazir Income Support Program, and maintaining a flexible exchange rate. Energy sector reforms, structural governance improvements, and climate resilience measures are also priorities.
The agreement follows intensive discussions between the IMF team and Pakistan officials since late February, although the delegation briefly cut short its visit due to security concerns. Approval from the IMF board is now awaited for the disbursements to be released.
