IMF, Pakistan reach a staff-level agreement
If approved by the IMF’s Executive Board, Pakistan will receive approximately $1.2 billion in funding—an important boost that would bring total support under the programs to about $4.5 billion.
The International Monetary Fund (IMF) and Pakistan reached a staff-level agreement after reviewing the country’s progress under two major financial support programs.
This agreement marked the successful completion of the third review of Pakistan’s Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF).
Though still awaiting final approval, the development reflected growing confidence in Pakistan’s economic direction. Behind the scenes, months of careful planning and disciplined policy implementation had brought the country to this point.
Under the EFF program, Pakistan focused on strengthening its public finances—working to increase revenues while controlling expenditures. At the same time, efforts were made to keep inflation within the target range set by the State Bank of Pakistan, ensuring stability for households and businesses alike.
One of the most challenging areas, the energy sector, also began to see reform. Long burdened by inefficiencies and debt, the sector is now undergoing changes aimed at improving its financial viability and performance. These reforms are crucial, as energy stability directly affects economic growth and daily life across the country.
A Turning Point for Pakistan’s Economy
In late February 2026, a delegation from the International Monetary Fund (IMF) arrived in Karachi and Islamabad with a critical mission. Led by Iva Petrova, the team began an in-depth review of Pakistan’s economic progress under two major financial support programs.
For days, policymakers, economists, and financial experts gathered around conference tables, discussing numbers that represented much more than data—they reflected the future of millions of people. The focus was on Pakistan’s ongoing journey under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).
By March 2, after intense discussions that continued even virtually, a breakthrough was reached.
Ms. Petrova stepped forward with an announcement that carried cautious optimism: Pakistan and the IMF had reached a staff-level agreement. If approved by the IMF Executive Board, the country would unlock approximately $1.2 billion in funding—an important boost that would bring total support under the programs to about $4.5 billion.
But this was not just about money.
Over the past year, Pakistan’s economy had shown signs of recovery. Growth was picking up, inflation was stabilizing, and confidence in the markets was slowly returning. The policies under the IMF program were beginning to take effect. Still, challenges loomed on the horizon. Rising tensions in the Middle East threatened global energy prices, casting uncertainty over inflation and economic growth.
Despite these risks, Pakistani authorities stood firm in their commitment.
They pledged to maintain strict fiscal discipline—aiming to reduce debt while ensuring essential spending on health, education, and social welfare. Tax reforms were underway, with efforts to widen the tax base and improve transparency through digital systems.
At the same time, special attention was being given to the country’s most vulnerable citizens. Through programs like the Benazir Income Support Programme, the government aimed to provide targeted relief, helping families cope with rising food and fuel costs.
The State Bank of Pakistan was also playing its role, keeping a close watch on inflation and ready to act if pressures increased. Meanwhile, reforms in the energy sector aimed to tackle long-standing issues like circular debt and inefficiency, while gradually shifting toward renewable energy.
Efforts to reform state-owned enterprises, reduce government interference in markets, and encourage private sector growth were gaining momentum. At the same time, climate resilience had become a priority, with new policies focusing on sustainable energy, disaster preparedness, and environmental protection.
As the IMF team prepared to depart, Ms. Petrova expressed gratitude for the cooperation and dialogue that had taken place. The meetings in Karachi and Islamabad were more than routine reviews—they were part of a broader effort to reshape Pakistan’s economic future.
The road ahead remained challenging, but for the first time in a while, there was a sense of direction—and cautious hope.
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