Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement on the fourth review of the $7 billion Extended Fund Facility (EFF) and the third review of the $1.4 billion Resilience and Sustainability Facility (RSF).
The agreement, announced by the IMF, could allow Pakistan to access about $1.2 billion from the fund after approval by the IMF Executive Board. This includes approximately $1 billion under the EFF and around $210 million under the RSF. If approved, total disbursements under the two arrangements would reach about $5.7 billion.
The IMF team, led by Iva Petrova, held discussions with Pakistani authorities from September 23 to October 7 as part of the 2026 Article IV consultation, the fourth EFF review and the third RSF review. The two sides also concluded the Article IV consultations.
According to the IMF, implementation of the EFF programme has remained broadly on track despite a challenging external environment. The fund said Pakistan has maintained macroeconomic stability while continuing reforms related to public finances, inflation, energy-sector viability, social protection and private-sector-led growth.
The IMF estimated Pakistan’s real GDP growth at 3.6% for FY26, after growth reached 4% during the first three quarters. Headline inflation moderated to around 10.3% in September after peaking in May, while gross foreign exchange reserves increased to about $21.5 billion by the end of September.
The fund also highlighted Pakistan’s fiscal reform priorities, including maintaining an underlying primary surplus of 2% of GDP in FY27, improving tax administration, expanding digital invoicing, strengthening risk-based audits and developing a medium-term tax reform strategy.
On social protection, the IMF said health and education spending increased from 2.2% of GDP in FY24 to 2.5% in FY26. Pakistan plans to increase this further to 2.8% of GDP in FY27, alongside improvements in targeted cash transfers and beneficiary coverage.
The IMF also called for reforms in the energy sector, including timely tariff adjustments, improved efficiency, greater private participation in electricity distribution, stronger gas-sector cost recovery and measures to reduce unaccounted-for gas losses.
Under the RSF, Pakistan is continuing reforms aimed at strengthening resilience to climate-related risks. These include climate considerations in public investment planning, disaster-risk financing, irrigation water pricing, targeted electricity subsidies, energy-efficiency standards and transport decarbonisation.
