Pakistan and International Monetary Fund staff reached agreement on the fourth review of the country’s Extended Fund Facility and the third review of its Resilience and Sustainability Facility. Executive Board approval would give Pakistan access to about $1.0 billion under the EFF and $210 million under the RSF. The two amounts would take cumulative disbursements under the arrangements to about $5.7 billion. The agreement remains subject to the Board’s decision.
The IMF mission held discussions with Pakistani authorities from 23 September to 7 October alongside the 2026 Article IV consultation. The Fund said real gross domestic product grew by 4% during the first three quarters of the 2026 financial year, before higher energy prices and supply disruptions weakened momentum. It estimated full-year growth at 3.6% and put September headline inflation at about 10.3%. Gross reserves had risen to about $21.5 billion by the end of September.
BOARD APPROVAL REMAINS THE FINANCING CONDITION
The EFF review assesses Pakistan’s performance under a 37-month arrangement, while the 28-month RSF supports reforms intended to improve resilience to climate shocks. Staff-level agreement confirms that the IMF mission and authorities have settled their review recommendations. It does not itself release the money, which remains conditional on consideration and approval by the Executive Board.
The policy programme keeps the 2027 financial-year budget anchored by an underlying primary surplus of 2% of GDP. Priorities include tax administration, digital invoicing, public investment management and measures to reduce debt rollover risks. The IMF also called for an appropriately tight monetary stance, exchange-rate flexibility and further reserve accumulation.
REFORMS COVER SOCIAL SPENDING ENERGY AND CLIMATE RESILIENCE
The authorities plan to raise health and education spending to 2.8% of GDP in the 2027 financial year from 2.5% in 2026. The programme also calls for targeted support for vulnerable households, energy tariff and efficiency reforms, and changes to strengthen disaster-risk financing. RSF work includes public-investment climate screening, irrigation-water pricing, energy-efficiency standards and transport decarbonisation.
The IMF said geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions continue to pose risks. Pakistan therefore has potential access to the new financing, rather than an approved disbursement. The next concrete milestone is the Executive Board’s review of the staff agreement and the associated $1.21 billion in access.