Key Takeaways
- Pakistan and the International Monetary Fund (IMF) reached a staff-level agreement on the fourth review of the Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF).
- The agreement allows Pakistan to access about $1.2 billion from the Fund’s resources.
- The deal is subject to approval by the IMF Executive Board.
Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement on the fourth review of the 37-month Extended Fund Facility (EFF) and the third review of the 28-month Resilience and Sustainability Facility (RSF), paving the way for Pakistan to access about $1.2 billion from the Fund’s resources.
The agreement was reached on Thursday, with the IMF team led by Ms. Iva Petrova holding discussions in Karachi and Islamabad from September 23 to October 7, 2026.
The IMF team noted that the fuel subsidy scheme should be phased out promptly, given its high cost and broad targeting. Any future fuel support, if oil prices surprise on the upside, should be limited, time-bound, targeted using established social assistance programmes, and accommodated within the FY27 budget envelope.
The agreement is subject to approval by the IMF Executive Board, which is expected to take place soon. Upon approval, Pakistan will have access to about $1 billion under the EFF and about $210 million under the RSF, bringing total disbursements under the two arrangements to about $5.7 billion.
The IMF statement highlighted that program 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 agreement also includes the conclusion of Article IV consultations, which are part of the regular process of assessing the economic and financial situation of member countries.
The staff-level agreement is a significant step towards ensuring continued financial support for Pakistan, which is crucial for addressing economic challenges and fostering sustainable growth.
The IMF’s commitment to Pakistan’s economic reforms and its willingness to provide financial support underscores the importance of the country’s ongoing efforts to stabilize its economy and improve its fiscal and social policies.
The IMF team has reached a staff-level agreement with the Pakistani authorities on the fourth review of the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the third review of the 28-month arrangement under the Resilience and Sustainability Facility (RSF).
IMF, Lending agency
The fuel support scheme should be phased out promptly, given its high cost and broad targeting.
Iva Petrova, Mission chief, IMF
