WASHINGTON – The International Monetary Fund (IMF) has reached a staff-level agreement with the Pakistani authorities on the fourth review of the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the third review of the 28-month arrangement under the Resilience and Sustainability Facility (RSF).
It comes after the IMF team led by, Iva Petrova, held discussions under the 2026 Article IV consultation and on the fourth review in Karachi and Islamabad from September 23 to October 7, 2026.
The staff-level agreement is subject to approval by the IMF Executive Board. Upon approval, Pakistan will have access to about US$1.0 billion (SDR 760 million) under the EFF and about US$210 million (SDR 154 million) under the RSF, bringing total disbursements under the two arrangements to about US$5.7 billion.
Supported by the EFF, the authorities have successfully navigated the impact of the Middle East conflict, and strong policies have helped preserve macroeconomic stability. Real GDP growth reached 4 percent in the first three quarters of FY26, and although higher energy prices and supply disruptions weakened somewhat the momentum, FY26 growth is estimated at 3.6 percent.
Headline inflation, after peaking in May, moderated to about 10.3 percent in September, while core inflation remained contained. The current account was broadly balanced in FY26 supported by strong remittances, and gross reserves rose to about US$21½ billion by end-September.
Sovereign rating upgrades and renewed international market access also point to stronger policy credibility. Nevertheless, risks remain high, particularly from geopolitical tensions, volatile energy prices, tighter global financial conditions, and trade disruptions.
The authorities remain committed to sound macroeconomic policies, which are critical to safeguarding stability amidst the ongoing shock-prone environment.
The authorities’ policy priorities include maintaining strong fiscal policies, enhancing public financial management, prioritizing social spending and advancing energy sector viability.
