ISLAMABAD: The International Monetary Fund (IMF) on Thursday reached a staff-level agreement with the Pakistani authorities on the fourth review under the $7 billion Extended Fund Facility (EFF) and the third review under the $1.4bn Resilience and Sustainability Facility (RSF), qualifying Pakistan to draw about $1.2bn from the Fund’s resources within four to five weeks.
“The IMF team has reached an SLA with the Pakistani authorities on the fourth review of the 37-month Extended Arrangement under the EFF and the third review of the 28-month arrangement under the RSF,” the lending agency announced in an early morning statement.
The staff-level agreement is subject to approval by the IMF Executive Board. Upon approval, Pakistan will have access to about $1bn (760 million special drawing rights, or SDR) under the EFF and about $210m (SDR 154m) under the RSF, bringing total disbursements under the two arrangements to about $5.7bn, it said.
The two sides also concluded Article IV consultations, the IMF announced from Washington headquarters.
“Programme implementation under the EFF has remained broadly on track despite a challenging external environment. The authorities remain committed to preserving macroeconomic stability, strengthening public finances, ensuring that inflation returns durably to the State Bank of Pakistan’s target range, enhancing energy sector viability, strengthening social protection and accelerating reforms to foster sustainable, private sector-led, and inclusive growth,” the IMF statement said.
The authorities have also continued to advance their climate reform agenda under the RSF to strengthen Pakistan’s resilience and reduce vulnerabilities to climate-related risks, it added.
The IMF team, led by Iva Petrova, was in Pakistan and held discussions under the 2026 Article IV consultation and on the fourth review of the EFF and the third review under the RSF from Sept 23 to Oct 7.
“Supported by the EFF, the authorities have successfully navigated the impact of the Middle East conflict, and strong policies have helped preserve macroeconomic stability. Real GDP growth reached 4 per cent in the first three quarters of FY26, and although higher energy prices and supply disruptions weakened somewhat the momentum, FY26 growth is estimated at 3.6pc.”
Nevertheless, the Fund said, risks remained high, particularly from geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions.
The authorities will stay the course in enhancing public financial management, it said, noting that they were “making progress in strengthening public financial management to improve the efficiency and transparency of the budget process, public investment, procurement and government cash management”.
“They remain committed to reducing debt rollover risks and servicing costs amid elevated gross financing needs, while advancing the development of the domestic government securities market and diversifying the investor base,” the IMF said.
On social protections, the IMF said authorities had arrested a long-term decline in health and education spending, raising it from 2.2pc of GDP in FY24 to 2.5pc of GDP in FY26.
It noted that the authorities were “committed to increasing it further to 2.8pc of GDP in FY27, closely monitoring implementation and reallocating resources as needed to meet this objective”.
“The planned increase in targeted cash-transfer benefits, together with continued improvements in beneficiary coverage and payment systems, will strengthen protection for vulnerable households and support more inclusive growth,” it said.
The IMF called for phasing out the fuel support scheme promptly, given its high cost and broad targeting. Any future fuel support should be limited, time-bound, targeted using established social assistance programmes, and accommodated within the FY27 budget envelope, it said.
It called on the State Bank to maintain an “appropriately tight” policy stance to ensure inflation returns durably to the SBP’s target range.
The Fund also called for timely tariff adjustments and cost-reducing reforms essential to prevent renewed circular debt accumulation while protecting vulnerable consumers.
Published in Dawn, October 9th, 2026
