Pakistan and the International Monetary Fund (IMF) have signed a staff-level agreement under the Extended Fund Facility (EFF). The IMF Executive Board will approve it. Pakistan will get a tranche of 1.2 billion dollars.
The IMF’s statement says Pakistan’s economic stability is improving. Market confidence has returned. For the first time in 14 years, Pakistan recorded a current account surplus in fiscal year 2025. Fiscal discipline exceeded program targets. Inflation is under control, and foreign exchange reserves increased.
The IMF added that Pakistan’s economic growth will stay between 3.25 and 3.5%. The government renewed its efforts to raise revenues, expand social protection, and reform the energy sector. The government is looking to make life a little easier for families by growing the Benazir Income Support Program (BISP), so more people can get help when they need it most.The IMF praised Pakistan’s climate reform efforts. The recent floods affected about seven million people, killed more than a thousand, and devastated the agricultural sector. The IMF urged sustained measures to implement holistic reforms for climate-related risks.
Eva Petrova, the leader of the IMF mission, said Pakistan’s economic program is on the right track. The financial situation is improving, and sovereign bond spreads dropped significantly.
Finance Minister Senator Muhammad Aurangzeb confirmed the agreement. He said constructive talks with the IMF mission continued. The agreement reflects global confidence in Pakistan’s economy. He said Pakistan will issue its first Green Panda Bond before the end of this year. The government plans to launch at least $1 billion in bonds in the international market next year.
He mentioned progress in privatizing Pakistan International Airlines (PIA) and three power distribution companies. After resuming flights to Europe and the UK, five international groups showed interest in acquiring PIA.
Pakistan will get $1 billion under the EFF and another 200 million under the Resilience and Sustainability Facility (RSF) after approval. The total disbursement will reach 3.3 billion dollars.
