The International Monetary Fund has reached a staff level agreement with Pakistan that could unlock around 1.2 billion dollars in financing, subject to approval by the Fund’s Executive Board.
The agreement covers reviews under Pakistan’s Extended Fund Facility and Resilience and Sustainability Facility programmes. If approved, the latest disbursement would take total financing released under the two programmes to around 5.7 billion dollars.
The IMF has warned that Pakistan’s economic outlook faces fresh pressure from higher energy costs and supply disruptions linked to the ongoing conflict in the Middle East. As a major energy importer, Pakistan remains exposed to international fuel price increases and disruption across regional supply chains.
The Fund said maintaining economic stability would require continued reforms and careful management of public finances. It stressed the importance of strengthening the energy sector and avoiding policies that add pressure on government finances.
As part of the reform programme, the IMF has called for costly and broad based energy subsidies to be phased out, arguing they place a heavy burden on the budget and distort energy prices. Pakistan has committed to maintaining fiscal discipline and working toward stronger public finances.
The agreement comes as Pakistan absorbs the effects of higher global energy prices and uncertainty around regional trade and supply routes. The IMF says continued reforms will matter for protecting recent gains in economic stability and improving resilience against external shocks.
The proposed 1.2 billion dollar release now depends on the IMF Executive Board’s approval before any funds are disbursed.
