IMF Reaches $1.2 Billion Loan Agreement with Pakistan

The International Monetary Fund has established a staff-level agreement with Pakistan for approximately $1.2 billion in financial assistance through two separate lending facilities. The arrangement includes $1 billion from the Extended Fund Facility and an additional $200 million through the Resilience and Sustainability Facility, pending formal approval by the IMF's Executive Board in the coming weeks.

Economic Assessment and Program Details

The agreement follows a comprehensive two-week evaluation mission conducted by IMF representatives in Karachi and Islamabad from September 24 to October 8. If ratified, the disbursement would increase total funding provided under both programs to approximately $3.3 billion, providing crucial financial support for Pakistan's ongoing economic stabilization efforts and structural reform initiatives.

Economic Progress and Natural Disaster Impact

IMF officials acknowledged Pakistan's economic recovery remains generally on track, noting the country achieved its first current account surplus in 14 years alongside improved fiscal performance and inflation management. However, the assessment highlighted significant economic headwinds from recent flooding that affected nearly 7 million citizens, caused over 1,000 fatalities, and substantially damaged housing, infrastructure, and agricultural land.

Commitment to Reform Agenda

The global financial institution confirmed Pakistani authorities have reaffirmed their commitment to maintaining sound macroeconomic policies and advancing structural reforms outlined in the EFF and RSF programs. This latest agreement builds upon previous IMF support, including last year's staff-level agreement on the final review of a $3 billion stabilization package designed to address Pakistan's balance of payments challenges.