Pakistan, IMF reach staff-level agreement under EFF and RSF reviews

ISLAMABAD: The International Monetary Fund (IMF) staff and the Pakistani have reached a staff-level agreement on the second review under Pakistan’s Extended Fund Facility (EFF) and the first review under the Resilience and Sustainability Facility (RSF).

Upon approval by IMF Executive Board, Pakistan would have access to about US$1.0 billion (SDR 760 million) under the EFF and about US$200 million (SDR 154 million) under the RSF, bringing total disbursements under the two arrangements to about US$3.3 billion.

“The IMF team has reached a staff-level agreement with the Pakistani authorities on the second review of the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the first review of the 28-month arrangement under the Resilience and Sustainability Facility (RSF)”.

The fund said, implementation of the EFF-supported program remained strong adding Pakistan committed to sustaining the fiscal effort to strengthen public finances while providing needed support to the victims of the recent floods; ensuring inflation remains durably within the State Bank of Pakistan’s (SBP) target range; restoring the viability of the energy sector; and advancing structural reforms.

The country’s climate reform agenda, backed by the RSF, is progressing, it said adding the recent floods highlight the critical need to consistently implement comprehensive reforms and policies that enhance resilience and reduce vulnerabilities to climate-related risks.

It further elaborated that IMF team, led by Iva Petrova, held discussions during September 24-October 8, 2025, mission to Karachi and Islamabad, and in Washington DC, for the second review under the Extended Fund Facility (EFF) and the first review under the Resilience and Sustainability Facility (RSF).

“Supported by the EFF, Pakistan’s economic program is entrenching macroeconomic stability and rebuilding market confidence.

The recovery remains on track, with the FY25 current account recording a surplus—the first in 14 years, the fiscal primary balance surpassing the program target, inflation remaining contained, external buffers strengthening, and financial conditions improving as sovereign spreads have narrowed significantly,” it said.

However, the recent floods- which have affected nearly 7 million people, caused over 1,000 deaths, and severely damaged housing, public infrastructure, and agricultural land- have weighed on the outlook, particularly of the agriculture sector, bringing down the projected FY26 GDP to about 3.25-3.50 percent. The floods underscore Pakistan’s high vulnerability to natural disasters and substantial climate-related risks, and the continuing need to build climate resilience.

“The authorities reaffirmed their commitment to the EFF- and RSF-supported programs, and to maintaining sound and prudent macroeconomic policies while advancing ongoing structural reforms,” it added.

The policy priorities include continuing the fiscal consolidation, strengthening poverty reduction and social protection, advancing fiscal structural reforms, maintaining an appropriately tight and data-dependent monetary policy, restoring the viability of the energy sector, advancing the pace of structural reform implementation, and building resilience to climate change.

The recent floods and the 2022 catastrophic events underscore the priority of building Pakistan’s climate resilience. Policies supported by the RSF and aligned with national commitments are helping to strengthen resilience, including recently implemented reforms to promote green mobility and transport decarbonization.

It said, Pakistan was committed to advancing future reforms, including strengthening the climate information architecture and financial risk management, improving water system resilience, establishing a framework for coordinated disaster risk financing, and aligning energy sector reforms with national mitigation commitments.

“The IMF team wants to express its sympathy to those affected by the recent floods, and is grateful to the Pakistani authorities, private sector, and development partners for many fruitful discussions and their hospitality throughout this mission,” it added.