IMF Reaches Staff-Level Agreement with Pakistan, Unlocking $1.21 Billion

The International Monetary Fund has reached a staff-level agreement with Pakistan on the latest reviews of its lending programs, potentially unlocking about $1.21 billion in financing, the Fund announced on October 7, 2026. The disbursement remains subject to approval by the IMF Executive Board.

If approved, Pakistan would gain access to roughly $1 billion under the Extended Fund Facility (EFF) and $210 million under the climate-focused Resilience and Sustainability Facility (RSF), bringing total disbursements under the two arrangements to around $5.7 billion.

What the Agreement Covers

The staff-level agreement (SLA) covers the fourth review of the 37-month Extended Arrangement under the EFF and the third review of the 28-month arrangement under the RSF, alongside the 2026 Article IV consultation. An IMF team led by Iva Petrova held discussions with Pakistani authorities in Karachi and Islamabad from September 23 to October 7, 2026.

According to the IMF, program implementation under the EFF has remained broadly on track despite a challenging external environment. The Fund noted that Pakistan had successfully navigated the impact of the Middle East conflict, with strong policies helping preserve macroeconomic stability in the face of higher energy prices and supply disruptions.

Key Economic Indicators Cited by the IMF

• GDP growth: Real GDP growth reached 4% during the first three quarters of FY26; full-year growth is estimated at 3.6%.
• Inflation: Headline inflation eased to about 10.3% in September after peaking in May, while core inflation remained contained.
• Reserves: Gross foreign exchange reserves rose to around $21.5 billion by the end of September.
• Current account: Broadly balanced in FY26, supported by strong remittances from overseas Pakistanis.

Reform Commitments

The IMF said Pakistani authorities remain committed to preserving macroeconomic stability, strengthening public finances, ensuring inflation returns durably to the State Bank of Pakistan’s target range, enhancing energy sector viability, strengthening social protection, and accelerating reforms to foster sustainable, private sector-led and inclusive growth.

Under the RSF, Pakistan is continuing its climate reform agenda, including climate-sensitive public investment, disaster risk financing, irrigation reforms, energy efficiency measures and transport decarbonisation, aimed at strengthening resilience and reducing vulnerability to climate-related risks.

Risks Remain Elevated

Despite the progress, the IMF warned that risks remain elevated due to geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions. Pakistan remains reliant on external financing to bolster foreign exchange reserves and meet debt repayments.

Analysts note that Pakistan is particularly exposed to a prolonged Middle East conflict given its dependence on Gulf energy imports, remittance inflows and financing support from the region.

What Happens Next

The staff-level agreement must now be approved by the IMF Executive Board. Once approved — a process that typically takes several weeks — the funds will be disbursed, taking total releases under the two programs to approximately $5.7 billion. Pakistani officials expect the board consideration within the coming weeks.

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Frequently Asked Questions

What is a staff-level agreement with the IMF?

A staff-level agreement means IMF staff and the country’s authorities have agreed on the economic policies and reforms needed to complete a program review. It is not final until the IMF Executive Board approves it, after which funds are disbursed.

How much will Pakistan receive under this agreement?

About $1.21 billion in total: roughly $1 billion (SDR 760 million) under the Extended Fund Facility and about $210 million (SDR 154 million) under the Resilience and Sustainability Facility.

What are the EFF and RSF programs?

The Extended Fund Facility is a 37-month, $7 billion arrangement supporting Pakistan’s economic reforms. The Resilience and Sustainability Facility is a 28-month, $1.4 billion arrangement focused on climate resilience and related reforms.

When will Pakistan receive the funds?

After the IMF Executive Board approves the reviews — typically within a few weeks of the staff-level agreement — the disbursements will be released, bringing total funding under the two programs to around $5.7 billion.