The International Monetary Fund (IMF) reached a staff-level agreement with Pakistan on Wednesday. This deal allows Pakistan to receive $1.2 billion after final approval. The funds include $1 billion from the Extended Fund Facility and $200 million from the Resilience and Sustainability Facility. This will bring total disbursements to around $3.3 billion under both programs.
The IMF praised Pakistan’s recent economic achievements. For the first time in 14 years, Pakistan recorded a current account surplus. The IMF also noted Pakistan’s success in controlling inflation and strengthening financial stability. Moreover, fiscal discipline improved, surpassing key program targets.
Read more: Finmin sees staff deal on $1.2bn IMF payout this week
However, the IMF expressed concern about recent devastating floods in Pakistan. Nearly seven million people were affected, and over 1,000 lives were lost. The floods damaged farmland and infrastructure, lowering the GDP forecast for the next year to about 3.25–3.5 percent. The IMF emphasized the need for stronger climate resilience policies.
The agreement also highlights Pakistan’s commitment to economic reforms. These include improving tax revenue, restoring energy sector health, and promoting privatization. Pakistan will also focus on boosting private sector growth and trade competitiveness. Under the Resilience Facility, it plans to enhance disaster risk financing and water management.
Read more: IMF, Pakistan Reach Preliminary Deal on $1.2 Billion Payout
The IMF thanked the Pakistani government and partners for their cooperation during the mission. It urged consistent policy implementation to protect economic recovery and vulnerable groups. After the Executive Board’s approval, the $1.2 billion tranche will support Pakistan’s ongoing reform journey. This signals cautious optimism for the country’s future.