Pakistan and the International Monetary Fund have reached a staff-level agreement for the disbursement of approximately USD 1.2 billion under two separate financial arrangements, the IMF said on Saturday.
The agreement follows the successful completion of the third review under the Extended Fund Facility and the second review under the Resilience and Sustainability Facility. The IMF mission had held talks with Pakistani officials in Karachi and Islamabad from February 25 to March 2, but had initially left without a deal. Discussions later continued virtually, leading to the agreement.
In a statement, the IMF said its staff and Pakistani authorities had reached a staff-level agreement on both reviews. Pakistanโs Ministry of Finance also confirmed the development, noting progress under the 37-month Extended Fund Facility and the 28-month Resilience and Sustainability Facility.
IMF mission chief Iva Petrova said that, subject to approval by the IMF board, Pakistan will gain access to about $1.0 billion under the Extended Fund Facility and around USD 210 million under the Resilience and Sustainability Facility.
She added that Pakistani authorities remain committed to maintaining prudent macroeconomic policies to preserve recent gains in macroeconomic stability. The focus will also remain on advancing structural reforms to support growth and strengthening social protection to cushion vulnerable groups from rising energy costs.
Pakistan had joined the IMF’s USD 7 billion Extended Fund Facility programme in 2024, aimed at stabilising the economy, rebuilding market confidence, sustaining fiscal reforms and addressing inefficiencies in the energy sector.
Separately, the country secured a USD 1.4 billion Resilience and Sustainability Facility last year, designed to enhance climate resilience, improve disaster management, increase water efficiency and promote green financing.
Pakistan’s crippling economy
Pakistan has been grappling with a deepening economic crisis marked by high inflation, a weakening currency and shrinking foreign exchange reserves. Rising prices of food, fuel and electricity have placed immense pressure on households, while businesses struggle with high borrowing costs and reduced demand. The countryโs dependence on imports, especially energy, has further exposed it to global price shocks.
A major concern has been Pakistanโs mounting debt burden, with a significant portion of government revenue going towards debt servicing. This has limited public spending on development and welfare, slowing economic growth. Efforts to stabilise the economy have often required tough measures such as subsidy cuts, tax increases and currency adjustments, which have added to public hardship.
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