IMF has reached a staff-level agreement with Pakistan that could unlock around $1.2 billion in financing, subject to approval by the Fund’s Executive Board.
The agreement covers reviews under Pakistan’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes. If approved, the latest disbursement would increase total financing released under the two programmes to around $5.7 billion.
The IMF has warned that Pakistan’s economic outlook is facing 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 vulnerable to international fuel price increases and disruptions in regional supply chains.
The Fund said maintaining economic stability would require continued implementation of reforms and careful management of public finances. It has also stressed the importance of strengthening the energy sector and avoiding policies that create additional 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 that such measures can place a heavy burden on the budget and distort energy prices. Pakistan has also committed to maintaining fiscal discipline and working toward stronger public finances.
The latest agreement comes as Pakistan faces the economic effects of higher global energy prices and uncertainty surrounding regional trade and supply routes. The IMF has said that continued reforms will be important for protecting recent gains in economic stability while improving resilience to external shocks.
The proposed $1.2 billion release will now depend on the IMF Executive Board’s approval before the funds can be disbursed.
