ISLAMABAD, October 8: The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement on the fourth review of the $7 billion Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF), clearing the way for about $1.2 billion in funding, subject to Executive Board approval.
Upon approval, Pakistan will receive about $1.0 billion under the EFF and about $210 million under the RSF. Total disbursements under the two arrangements will rise to about $5.7 billion.
The agreement followed discussions held in Karachi and Islamabad from September 23 to October 7, led by IMF mission chief Iva Petrova. The IMF also completed the 2026 Article IV consultation.
The IMF said Pakistan had navigated the impact of the Middle East conflict while preserving macroeconomic stability. Real GDP growth is estimated at 3.6 percent for FY26. Headline inflation eased to about 10.3 percent in September after peaking in May, and gross reserves rose to about $21.5 billion by the end of September. The current account was broadly balanced, supported by strong remittances.
The Fund cautioned that risks remain high, citing geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions.
Among its priorities, the IMF urged strict implementation of the FY27 budget, anchored by a primary surplus of 2.0 percent of GDP and a tight monetary stance. It also called for the prompt phase-out of the fuel support scheme and timely energy tariff adjustments. Health and education spending is to rise from 2.5 percent of GDP in FY26 to 2.8 percent in FY27.
Petrova held a wrap-up session with Finance Minister Muhammad Aurangzeb in Islamabad.
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