Pakistan Secures IMF Staff-Level Agreement for $1.3 Billion Loan

ISLAMABAD: Pakistan has reached a staff-level agreement (SLA) with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), unlocking $1.3 billion in financial support. The agreement, pending approval by the IMF Executive Board, is expected to provide a crucial boost to Pakistan’s economic recovery.

A team from the IMF, led by Nathan Porter, held discussions with Pakistani authorities in Karachi and Islamabad from February 24 to March 14, 2025. The agreement includes a new 28-month RSF arrangement and the first review of the ongoing 37-month EFF program. Once approved, Pakistan will receive an immediate disbursement of $1.0 billion, raising total disbursements under the EFF to $2.0 billion.

Despite global economic uncertainty, Pakistan has made notable progress in stabilizing its economy. Inflation has dropped to its lowest level in a decade, financial conditions have improved, and external balances have strengthened. However, significant risks remain, including macroeconomic policy slippages, geopolitical uncertainties affecting commodity prices, and climate-related vulnerabilities.

Nathan Porter, IMF mission chief, emphasized the need for Pakistan to sustain its reform momentum. He stated that it is critical to stay the course, ensuring price stability, strengthening public finances, and eliminating economic distortions to support sustainable private sector-led growth.

The IMF said in a statement that the latest staff-level agreement signals its confidence in Pakistan’s economic reforms and resilience. The agreement is expected to restore investor confidence, stabilize the currency, and pave the way for long-term economic recovery. However, the government faces the challenge of balancing fiscal discipline with social and developmental spending.

As Pakistan moves forward, the successful implementation of these reforms will be critical in ensuring sustained economic stability and growth.