The International Monetary Fund (IMF) and Pakistan have reached an agreement at staff level on the first review of Pakistan’s extended fund facility (EFF) and a new event under Resilience and Sustainability Facility (RSF), according to an official IMF statement published today.
The staff level agreement, which is subject to the approval of the IMF’s Executive Board, includes access to around $ 1.3 billion under ROSF for climate consumption and sustainability efforts over the next 28 months.
In addition, the agreement gives Pakistan approx. 1.0 billion dollars under EFF, bringing the total payouts under the program to around $ 2.0 billion.
This agreement comes after extensive discussions between IMF staff, led by Nathan Porter, and Pakistani authorities, including meetings held in Karachi and Islamabad between February 24 and March 14, 2025.
According to the IMF, Pakistan has made significant progress in restoring macroeconomic stability despite a challenging global environment.
The most important focus of the EFF-supported program is on fiscal consolidation, monetary policy to control inflation and reforms to improve Pakistan’s energy sector.
The Pakistani government aims to reduce public debt, improve the viability of the energy sector and improve social protection, especially for health and education.
RSF, designed to tackle long -term vulnerabilities to Klimachok, will support Pakistan’s efforts to build resistance to natural disasters and improve climate adaptation. Specific goals include improving public investment planning, improving water consumption efficiency and promoting green energy and mobility.
In line with the agreement, Pakistani authorities repeated their obligation to pursue structural reforms in key areas.
The government is focused on continued fiscal reforms to reduce public debt and secure transparency. Efforts to strengthen tax systems and improve public financial management are also central to the reform agenda.
The IMF has emphasized the importance of maintaining tight monetary policies to control inflation, which has fallen to its lowest level since 2015 and build currency reserves to stabilize the economy.
In addition, Pakistan plans to pursue reforms of the energy sector to reduce costs and improve distribution efficiency.
Despite the future progress, the IMF warns that risks remain increased, especially regarding global economic conditions and climate -related challenges. Pakistan must keep the course with its reform efforts to ensure long -term growth and stability.
The IMF has also recognized Pakistan’s obligation to achieve climate adaptation targets and emphasized the importance of continued support for disaster resistance initiatives.
“Over the past 18 months, Pakistan has made significant progress in restoring macroeconomic stability and rebuilding confidence despite a challenging global environment. While economic growth remains moderate, inflation has fallen to its lowest level since 2015, economic conditions have improved that sovereign spreads have also narrowed. Raw material prices, tight global economic conditions or rising protectionism can undermine the hard -won macroeconomic stability.
“In this context, it is critical to remain the course and anchor the progress gained in the last year and a half, build resilience by further strengthening the public economy, ensuring price stability, rebuilding external buffers and eliminating distortions to support stronger, inclusive and sustained private sector -led growth.”
The IMF team also thanked Pakistani authorities, the private sector and development partners for their hospitality and productive discussions during the mission of Islamabad and Karachi.
