Islamabad (Pakistan), March 26: Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement on the first review of Pakistan’s 37-month USD 7 billion Extended Fund Facility (EFF) and a new 28-month USD 1.3 billion arrangement under the Resilience and Sustainability Facility (RSF), confirmed both the Pakistani government and the IMF on Tuesday.
As per a statement by the IMF cited by ARY News, the staff-level agreement covers the first review of the EFF and a new RSF arrangement, granting Pakistan access to approximately USD 1.3 billion over the next 28 months. Once approved by the IMF’s Executive Board, Pakistan will be able to access about USD 1 billion under the EFF, bringing the total disbursements to around USD 2 billion.
Khurram Schehzad, Advisor to Pakistan’s Finance Minister, confirmed the agreement, noting significant progress in Pakistan’s economic reforms, with key focuses on tax equity, monetary stability, energy sector transformation, and climate resilience.
The IMF highlighted that Pakistan has made notable strides in restoring macroeconomic stability and rebuilding confidence in the past 18 months, despite a difficult global environment. The IMF also stated that while economic growth remains moderate, inflation has dropped to its lowest point since 2015, financial conditions have improved, sovereign spreads have narrowed, and external balances are stronger.
However, the IMF cautioned about potential risks, including pressures to ease policies, geopolitical shocks to commodity prices, tighter global financial conditions, and rising protectionism, which could threaten economic stability.
The IMF also pointed out the significant challenge of climate-related risks, urging Pakistan to focus on resilience-building and adaptation measures. It stressed the importance of maintaining progress by strengthening public finances, ensuring price stability, rebuilding external buffers, and eliminating distortions to foster inclusive, private-sector-driven growth.
The IMF team expressed gratitude to the Pakistani authorities, private sector, and development partners for their hospitality during their visit to Islamabad and Karachi, as well as for the “fruitful” discussions held.