Pakistan Set to Receive $1.2 Billion Following Staff-Level Agreement With IMF

The International Monetary Fund (IMF) has announced that a staff-level agreement has been finalized with Pakistan under its loan program, paving the way for the disbursement of $1.2 billion pending formal approval by the IMF Executive Board.

According to the IMF’s official statement, Pakistan’s economic program supported under the Extended Fund Facility (EFF) is gradually advancing toward macroeconomic stabilization and the restoration of market confidence. The Fund highlighted significant improvements in the country’s economic indicators during the fiscal year 2025.

Notably, the current account recorded a surplus for the first time in 14 years, fiscal performance surpassed program targets, inflationary pressures remained contained, and foreign exchange reserves showed positive growth. The IMF projects GDP growth between 3.25% and 3.5% for the period.

The IMF also commended Pakistan’s ongoing environmental reform initiatives, while acknowledging the devastating impact of recent floods that affected millions of people, resulted in over 1,000 fatalities, and caused severe damage to crops and housing infrastructure. The statement emphasized that comprehensive and sustained reforms are essential to mitigate environmental vulnerabilities.

Furthermore, the IMF noted the government’s continued commitment to energy sector sustainability, fiscal prudence, and structural reforms as central elements of its economic strategy.

Earlier, Finance Minister Senator Muhammad Aurangzeb stated that constructive discussions were underway with the IMF mission. In an interview with a foreign news agency, he confirmed that Pakistan plans to issue its first Green Panda Bond before the end of the year, signaling efforts to diversify financing avenues.

He also disclosed progress on the privatization of Pakistan International Airlines (PIA) and three power distribution companies. The resumption of PIA flights to Europe and the United Kingdom has increased investor interest, with five groups expressing interest in the airline’s privatization.

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