Pakistan, IMF seal $1.2bn staff-level deal

Pakistan and the International Monetary Fund have struck a staff-level pact covering the fourth review of the 37-month Extended Fund Facility and the third review of the 28-month Resilience and Sustainability Facility, Mettis Global reported. The understanding opens the way for roughly $1.2bn in disbursements, though only once the IMF Executive Board signs off on it. Of that amount, about $1.0bn (SDR 760mn) would flow through the EFF and about $210mn (SDR 154mn) through the RSF, lifting total disbursements under both arrangements to around $5.7bn.

Talks in Karachi and Islamabad ran between September 23 and October 7, 2026, with the mission headed by Iva Petrova. Implementation of the lending programme has stayed broadly on course despite a tough external setting, and officials have handled Middle East conflict spillovers while keeping macroeconomic stability intact. Economic expansion reached 4% over the first nine months of FY26, but costlier energy and supply snags dented momentum, so the full-year estimate now stands at 3.6%.

Headline inflation slowed to roughly 10.3% in September from its May peak, while the current account ended FY26 close to balance, helped by robust remittances. Reserves reached around $21.5bn by the end of September, and the fund cited sovereign rating upgrades as a sign of firmer policy credibility. It warned that risks from geopolitical strains, unstable energy costs, tougher global financing and trade disruption remain elevated.