In a major economic development, Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement under the Extended Fund Facility (EFF), paving the way for the disbursement of $1.2 billion after approval from the IMF Executive Board.
According to an IMF statement, Pakistan’s economic reform program, supported by the Fund, is steadily progressing toward stability and restoring market confidence. The IMF noted significant improvement in Pakistan’s key economic indicators during the fiscal year 2025.
The statement highlighted that Pakistan’s current account recorded a surplus for the first time in 14 years, while fiscal balance performance exceeded program targets. Inflation has come under control, foreign exchange reserves have strengthened, and the country’s economic growth is projected between 3.25 and 3.5 percent.
The IMF also commended Pakistan’s environmental reform efforts, acknowledging the government’s resilience and recovery measures following the recent devastating floods that claimed over 1,000 lives and caused severe damage to crops and homes.
The Fund stressed the importance of consistent implementation of climate resilience reforms and broader structural policies to mitigate environmental risks.
It also recognized the government’s determination to advance energy sector sustainability, fiscal discipline, and structural reforms, noting that Islamabad remains committed to addressing long-standing economic challenges.
Earlier, Finance Minister Muhammad Aurangzeb said in an interview with an international news outlet that constructive discussions with the IMF mission were underway and that Pakistan was on track to issue its first Green Panda Bond before the end of the year.
He added that progress had been made on the privatization of the national airline and three electricity distribution companies, noting that five investment groups had expressed interest in acquiring stakes in Pakistan International Airlines (PIA).
Aurangzeb also pointed out that the resumption of flights to Europe and the United Kingdom would make the national carrier more attractive to investors.
