The International Monetary Fund (IMF) and Pakistan have reached an agreement at the personnel level on the first review of the extended installation of the Pakistan Fund (EF) and a new agreement under the center of resilience and sustainability (RSF), according to an official statement of the IMF published today.
The personnel agreement, which is subject to the approval of the IMF Executive Board, includes access to around $ 1.3 billion under the RSF for climate resistance and sustainability efforts during the next 28 months.
In addition, the agreement provides Pakistan for approximately $ 1.0 billion under the EFF, which raises total disbursements under the program to around $ 2.0 billion.
This agreement occurs after broad discussions between IMF personnel, led by Nathan Porter and the Pakistani authorities, including meetings held in Karachi and Islamabad between February 24 and March 14, 2025.
According to the IMF, Pakistan has progressed significantly in the restoration of macroeconomic stability despite a challenging global environment.
The key approach of the program backed by EFF is fiscal consolidation, monetary policy to control inflation and reforms to improve the Pakistan energy sector.
The Pakistani government aims to reduce public debt, improve the viability of the energy sector and improve social protection, especially for health and education.
The RSF, designed to address long -standing vulnerabilities to climatic shocks, will support Pakistan’s efforts to generate resilience to natural disasters and improve climate adaptation. Specific objectives include improving public investment planning, improving water use efficiency and promoting green energy and mobility.
In line with the agreement, the Pakistani authorities reiterated their commitment to seek structural reforms in key areas.
The government focuses on continuing tax reforms to reduce public debt and guarantee transparency. Efforts to strengthen tax systems and improve public financial management are also fundamental for the reform agenda.
The IMF has emphasized the importance of maintaining narrow monetary policies to control inflation, which has fallen to its lowest level since 2015, and build foreign exchange reserves to stabilize the economy.
In addition, Pakistan plans to pursue reforms from the energy sector to reduce costs and improve distribution efficiencies.
Despite the progress made, the IMF warns that the risks remain high, particularly in relation to global economic conditions and climate -related challenges. Pakistan must maintain the course with their reform efforts to ensure long -term growth and stability.
The IMF has also recognized Pakistan’s commitment to achieve climate adaptation objectives and emphasized the importance of continuous support for disaster resilience initiatives.
“In the last 18 months, Pakistan has made significant progress in the restoration of macroeconomic stability and the reconstruction of confidence despite a challenging global environment. Although economic growth remains moderate, inflation has decreased to its lowest level since 2015, the financial conditions of 2015 have also improved, sovereign propagations have been significantly reduced, and external balances are stronger. Economic activity is expected to improve financial risks also be high. A need for construction recovery capacity, including adaptation measures.
“In this sense, it is essential to maintain the course and strengthen the progress achieved in recent years, generating resilience by further strengthening public finances, guaranteeing the stability of prices, rebuilding external shock absorbers and eliminating distortions in support of growth led by the strongest, most inclusive and sustained private sector.”
The IMF team also thanked the Pakistani authorities, the private sector and development partners for their hospitality and productive discussions during the mission to Islamabad and Karachi.
