Pakistan has reached a staff-level agreement (SLA) with the International Monetary Fund (IMF) to unlock $1.2 billion in new funding, pending formal approval from the fund’s Executive Board. Reuters
The package includes $1 billion under the Extended Fund Facility (EFF) and $200 million under the Resilience and Sustainability Facility (RSF) — bringing total potential disbursements under these programs to approximately $3.3 billion. The News International
✅ Economic Gains & Macro Stability
In its announcement, the IMF praised Pakistan’s program implementation, noting strides in macroeconomic stability, improved market confidence, narrowed sovereign spreads, and strengthened external buffers. Reuters
Finance Minister Muhammad Aurangzeb, currently in Washington, expressed optimism about the agreement and emphasized that the country would soon re-enter global capital markets — possibly starting with a green bond denominated in Chinese yuan. Reuters
☔ Floods & Climate Risks Pose a Challenge
While the IMF deal offers a lifeline, recent catastrophic floods have weighed heavily on the outlook. The disasters damaged agricultural output, infrastructure, and displaced millions, reducing projected FY26 GDP growth to 3.25–3.5 %. Reuters
The IMF underscored the urgency for Pakistan to build climate resilience, especially through stronger disaster risk management, water systems, and structural reforms under the RSF. IMF
🛠️ Reform Agenda & Policy Commitments
Under the agreement, Pakistan has reaffirmed its commitment to:
- Fiscal prudence, including meeting a 1.6 % primary surplus target for FY26 Reuters
- Revenue mobilization through tax reforms and compliance improvements Reuters
- Energy sector reform, privatization, and reducing state interference in economic sectors IMF
- Alignment of provincial and federal revenue systems for efficient burden sharing IMF
- Maintaining institutional discipline to keep inflation in check and adjusting monetary policy as needed Reuters
📌 What Happens Next?
The SLA must now gain formal approval from the IMF Executive Board before Pakistan can draw the funds. IMF
Once approved, the inflows will give breathing room to debt servicing, foreign reserves, public investment, and climate recovery efforts. The move is also seen as a vote of confidence in Pakistan’s economic trajectory.
🇵🇰 Stay tuned — we’ll continue tracking this story as Pakistan moves closer to unlocking crucial financial support.
