Agreement reached paving the way for Pakistan to receive $1.21 billion from the IMF

Pakistan and the International Monetary Fund have reached a staff-level agreement on the economic review, paving the way for the country to receive a new financial assistance of $1.21 billion.

According to the IMF, this development came after negotiations on the fourth review under the Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF). The final decision is now subject to the approval of the Fund’s Executive Board.

If approved, Pakistan will receive $1 billion under the EFF and $210 million under the RSF. The total financial assistance under both programs amounts to $1.21 billion.

The Fund appreciated the steps taken by the Pakistani authorities to achieve economic goals. According to the IMF, the program has improved economic stability, while the implementation of reforms has also progressed.

Economic performance was also discussed during the review.  According to the IMF, Pakistan’s growth rate during July 2025 to March 2026 was 4 percent, however, the impact of the situation in the Middle East put pressure on growth. Inflation reached a high level in May 2026, while remittances from Pakistanis abroad supported the current account.

The IMF has also emphasized policy regarding petroleum subsidies. According to the organization, instead of further expanding the subsidy program, it should be limited in stages and financial assistance should be provided only to the truly deserving.

The energy sector will also remain important in the upcoming reform agenda. The Fund has emphasized improving the receivables and payables situation of energy companies, reducing production costs and reducing losses in the gas sector.

The staff-level agreement also highlights the importance of the next phase of economic reforms, along with creating immediate financial space for Pakistan. However, the final approval of the IMF Executive Board will be required for the disbursement of the money.